HARRINGTON PARK
BOARD OF EDUCATION
Harrington Park Board of Education Harrington Park, New Jersey
Comprehensive Annual Financial Report For The Fiscal Year Ended June 30, 2017
COMPREHENSIVE ANNUAL
FINANCIAL REPORT
of the
Harrington Park Board of Education
Harrington Park, New Jersey
For The Fiscal Year Ended June 30, 2017
Prepared by
Harrington Park Board of Education Finance Department
HARRINGTON PARK BOARD OF EDUCATION TABLE OF CONTENTS
Letter of Transmittal Organizational Chart Roster of Officials Consultants and Advisors
Independent Auditor's Report
INTRODUCTORY SECTION
FINANCIAL SECTION
Required Supplementa1y Information - Part I
Management's Discussion and Analysis
Basic Financial Statements
A. District-wide Financial Statements:
A-1 A-2
Statement of Net Position Statement of Activities
B. Fund Financial Statements:
Governmental Funds: B-1 Balance Sheet B-2 B-3
Statement of Revenues, Expenditures, and Changes in Fund Balances Illustrative Reconciliation of the Governmental Funds Statement of Revenues,
Expenditures, and Changes in Fund Balances with the District-Wide Statements
Proprietary Funds: B-4 Statement of Net Position B-5 B-6
Statement of Revenues, Expenses, and Changes in Net Position Statement of Cash Flows
Fiduciary Funds: B-7 Statement of Fiduciary Net Position
Notes to the Financial Statements
i-iii JV
v Vl
1-3
4-17
18 19
20-21 22
23
24 25 26
28
29-61
HARRINGTON PARK BOARD OF EDUCATION TABLE OF CONTENTS
Required Supplementary Information -Part II
C. Budgetary Comparison Schedules
C-1 C-2
Budgetary Comparison Schedule - General Fund Budgetaty Comparison Schedule - Special Revenue Fund
Notes to the Required Supplementary Information - Part II
C-3 Budgetary Comparison Schedule -Note to Required Supplementary Information
Required Supplementary Information -Part III
L. Schedules Related to Accounting and Reporting for Pensions (GASB 68)
L-1
L-2
L-3
L-4
Required Supplementary Information- Schedule of the District's Proportionate Share of the Net Pension Liability -Public Employees Retirement System
Required Supplementary Information- Schedule of District Contributions -Public Employees Retirement System
Required Supplementary Information- Schedule of the District's Proportionate Share of the Net Pension Liability- Teachers Pension and Annuity Fund
Notes to Required Supplementary Information
D. School Level Schedules- Not Applicable
E. Special Revenue Fund:
E-1
E-2
Combining Schedule of Program Revenues and Expenditures Special Revenue Fund -Budgetary Basis
Schedule of Preschool Education Aid ExpendituresBudgetary Basis -Not Applicable
F. Capital Projects Fund:
F-1 Surnrnary Statement of Project Expenditures F-2 Surnrnary Schedule of Revenues, Expenditures and Changes in
Fund Balance -Budgetary Basis -Not Applicable F-2a Schedule of Project Revenues, Expenditures, Project Balance and
Project Status- Budgetary Basis- Boiler Replacement at Hanington Park Public School
G. Proprietary Funds:
Enterprise Fund: G-1 Statement of Net Position- Not Applicable G-2 Statement of Revenues, Expenses and Changes in
Net Position- Not Applicable G-3 Statement of Cash Flows -Not Applicable
62-67 68
69
70
71
72 73
74
75
76
77
78
79
79 79
HARRINGTON PARK BOARD OF EDUCATION TABLE OF CONTENTS
H. Fiduciary Funds:
I.
H-1 H-2 H-3 H-4
Combining Statement of Assets and Liabilities Combing Statement of Changes in Fiduciary Net Position- Not Applicable Student Activity Agency Fund Schedule of Receipts and Disbursements Payroll Agency Fund Schedule of Receipts and Disbursements
Long-Term Debt:
I-1 Schedule of Serial Bonds I-2 Schedule of Obligations Under Capital Leases- Not Applicable I-3 Debt Service Fund Budgetary Comparison Schedule
STATISTICAL SECTION (Unaudited)
J-1 Net Position by Component J-2 Changes in Net Position J-3 Fund Balances - Governmental Funds J-4 Changes in Fund Balances - Governmental Funds J-5 General Fund Miscellaneous Revenue by Source J-6 Assessed Value and Actual Value of Taxable Property J-7 Direct and Overlapping Property Tax Rates J-8 Principal Property Taxpayers J-9 Property Tax Levies and Collections J-10 Ratios of Outstanding Debt by Type J-11 Ratios of Net General Obligation Debt Outstanding J-12 Direct and Overlapping Governmental Activities Debt J-13 Legal Debt Margin Information J-14 Demographic and Economic Statistics J-15 Principal Employers J-16 Full-Time Equivalent District Employees by Function/Program J-17 Operating Statistics J-18 School Building Information J-19 Schedule of Required Maintenance for School Facilities J-20 Insurance Schedule
80 81 81 82
83 84 85
86 87 88 89 90 91 92 93 94 95 96 97 98 99
100 101 102 103 104 105
K-1
K-2
K-3
K-4
K-5
K-6
K-7
K-7
K-8
HARRINGTON PARK BOARD OF EDUCATION TABLE OF CONTENTS
SINGLE AUDIT SECTION
Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards
Report on Compliance for each Major State Program; Repmi on Internal Control Over Compliance; and Report on Schedule of Expenditures of State Financial Assistance as Required by New Jersey OMB Circular 15-08- Independent Auditor's Report
Schedule of Expenditures of Federal Awards
Schedule of Expenditures of State Financial Assistance
Notes to the Schedules of Expenditures of Federal Awards and State Financial Assistance
Schedule of Findings and Questioned Costs- Part 1 -Summary of Auditor's Results
Schedule of Findings and Questioned Costs- Part 2- Schedule of Financial Statement Findings
Schedule of Findings and Questioned Costs- Part 3- Schedule of Federal and State Award Findings and Questioned Costs
Summary Schedule of Prior Year Findings
106-107
108-110
111
112
113-114
115
116
117
118
INTRODUCTORY SECTION
HARRINGTON PARK SCHOOL DISTRICT
BOARD OF EDUCATION
Adam D. Fried, Ed. D. Superintendent/Board Secretary
December 4, 20 17
Honorable President and Members of the Harrington Park Board of Education Harrington Park, New Jersey 07640
Dear Board Members:
Bryan Jursca Business Administrator
The comprehensive annual financial report of the Han·ington Park School District for the fiscal year ending June 30, 2017 is hereby submitted. Responsibility for both the accuracy of the data and completeness and fairness of the presentation, including all disclosures, rests with the management of the Board of Education (Board). To the best of our knowledge and belief, the data presented in this report is accurate in all material respects and is reported in a manner designed to present fairly the basic financial statements and results of operations of the District. All disclosures necessary to enable the reader to gain an understanding of the District's financial activities have been included.
The comprehensive annual financial report is presented in four sections: introductory, financial, statistical and single audit. The introductory section includes this transmittal Jetter, the District's organizational chart and a Jist of principal officials. The financial section includes the independent auditors report, management discussion and analysis, the basic financial statements and notes. The statistical section includes selected financial and demographic information, generally presented on a multi-year basis. The District is required to undergo an annual single audit in conformity with the provisions of the State Treasury Circular Letter OMB 15-08, "Single Audit Policy for Recipients of Federal Grants, State Grants and State Aid Payments". !nfmmation related to this single audit, including the auditor's report on the internal control structure and compliance with applicable laws and regulations and findings and recommendations, are included in the single audit section of this report.
1. REPORTING ENTITY AND ITS SERVICES: Harrington Park School District is an independent reporting entity within the criteria adopted by the GASB as established by GASB Statement No. 14. All funds of the District are included in this report. The Harrington Park Board of Education and its school constitute the District's reporting entity.
The District provides a full range of educational services appropriate to grade levels K through 8. These include regular, as well as special education for handicapped youngsters. The 2016-17 fiscal year enrollment was 631 students. The following details the changes in the student enrollment of the District over the last ten years.
i
Student Enrollment
Fiscal Student Percent Year Enrollment Change
2016-17 631.0 -0.16 2015-16 632.0 -0.16 2014-15 633.0 -0.63 2013-14 637.0 - 1.73 2012-13 648.0 -6.64 2011-12 691.0 +0.14 2010-11 690.0 -3.04 2009-10 711.6 - 1.30 2008-09 721.0 -2.30 2007-08 738.0 +3.65
2. ECONOMIC CONDITION AND OUTLOOK: The Harrington Park area continues to experience development and expansion as new residential housing permits mostly for significant expansions or demolition of current homes which are replaced by larger residences. Also, tbe trend continues for longtime residents without children in the school system to sell to younger families witb school-age children.
3. MAJOR INITIATIVES: During the 2016-17 academic year, the Harrington Park School District continued its long-term focus on improving students' performance in all academic areas through innovation. The District provided professional development opportunities for all staff members who are responsible for implementing new programs or curriculum.
4. FINANCIAL ACCOUNTING CONTROLS: Administrators of the District are responsible for establishing and maintaining an internal control structure designed to ensure that the assets of the District are protected from loss, tbeft or misuse, and to ensure that adequate accounting data is compiled to allow for the preparation of financial statements in conformity with generally accepted accounting principles (GAAP). The internal control structure is designed to provide reasonable, but not absolute, assurance that these objectives are met. The concept of reasonable assurance recognizes that:
(I) the cost of a control should not exceed tbe benefits likely to be derived; and (2) the valuation of costs and benefits requires estimates and judgments by management.
As a recipient of Federal and State fmancial assistance, the District also is responsible for ensuring that an adequate internal control structure is in place to ensure compliance with applicable laws and regulations related to those programs. The internal control structure is also subject to periodic evaluation by the District management.
As part of the District's single audit described earlier, tests are made to determine the adequacy of the internal control structure, including the portion related to federal and state financial assistance programs, as well as to determine tbat the District has complied witb applicable laws and regulations.
ii
5. BUDGETARY CONTROLS: In addition to internal accounting controls, the District maintains budgetary controls. The objective of these budgetary controls is to ensure compliance with legal provisions embodied in the annual appropriated budget approved by the voters of the municipality. Annual appropriated budgets are adopted for the general fund, the special revenue fund, and the debt service fund. Project-length budgets are approved for the capital improvements accounted for in the capital projects fund. The final budget amount as amended for the fiscal year is reflected in the fmancial section.
An encumbrance accounting system is used to record outstanding purchase commitments on a line item basis. Open encumbrances at year-end are either canceled or are included as re-appropriations of fund balance in the subsequent year. Those amounts to be re-appropriated are reported as reservations of fund balance at June30,2017.
6. CASH MANAGEMENT: The investment policy of the District is guided in large part by state statute as detailed in "Notes to the Financial Statements". The District has adopted a cash management plan which requires it to deposit public funds in public depositories protected from loss under the provisions of the Governmental Unit Deposit Protection Act ("GUDPA"). GUDPA was enacted in 1970 to protect Governmental Units from a loss of funds on deposit with a failed banking institution in New Jersey. The law requires governmental units to deposit public funds only in public depositories located in New Jersey, where the fimds are secured in accordance with the Act.
7. RISK MANAGEMENT: The Board carries various forms of insurance, including but not limited to general liability, automobile liability and comprehensive/collision, hazard and theft insurance on property and contents and fidelity bonds.
8. INDEPENDENT AUDIT: State statutes require an annual audit by independent certified public accountants or registered municipal accountants. The accounting firm of Lerch, Vinci & Higgins, LLP was selected by the Board. In addition to meeting the requirements set forth in State statutes, the audit also was designed to meet the requirements of the State Treasury Circular Letter OMB 15-08. The auditor's report on the basic financial statements and specific required supplemental information is included in the financial section of this report. The auditor's reports related specifically to the single audit are included in the single audit section of this report.
9. ACKNOWLEDGMENTS:
We would like to express our appreciation to the members of the Harrington Park School Board for their concern in providing fiscal accountability to the citizens and taxpayers of the school district and thereby contributing their full support to the development and maintenance of our fmancial operation. The preparation of this report could not have been accomplished without the efficient and dedicated services of our fmancial and accounting secretaries.
Respectfully submitted,
Adam D. Fried, Ed. D. Superintendent/Board Secretary
iii
Bryan Jursca Business Administrator
1-'· <:
HARRINGTON PARK BOARD OF EDUCATION
I Board of Education
I I
Superintendent/Board Secretary
I Principal I I
I Business Administrator J
I Program Director I I
I Child Study Team I I I Business/Board Support Staff r--
[lnstructioiiafstafl If-----' y House & Grounds I
Harrington Park Board of Education
Roster of Officials
June 30, 2017
Members of the Board of Education Term Expires
Eric Fishbein, President
Dianne Smith, Vice President
Brenda Cho, Trustee
Tsampicos Perides, Trustee
Laura Wood, Trustee
Other Officials
Adam Fried, PhD., Superintendent/Board Secretary
Bryan Jursca, Business Administrator
John Dineen, Esq., Attorney
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2020
2020
2019
2018
2019
HARRINGTON PARK BOARD OF EDUCATION CONSULTANTS AND ADVISORS
Audit Firm
Lerch, Vinci & Higgins, LLP 17-17 Route 208
FairLawn, NJ 07410
Attorney
Netchert, Dineen & Hillman, Esq. 294 Harrington Ave., Suite 3
Closter, NJ 07624
Official Depository
Capital One Bank 600 Piermont Rd. Closter, NJ 07624
VI
FINANCIAL SECTION
LERCH, VINCI & HIGGINS,LLP CERTIFIED PUBLIC ACCOUNTANTS REGISTERED MUNICIPAL ACCOUNTANTS
DIETER P. LERCH. CPA. RMA . PSA
GARY J. VINCI. CPA, RMA. PSA
GARY W. !·IlGGlNS . CPA. RMA. I'SA
JEFFREY C. BLISS , CPA. RMA. PSA
PA\JLJ . LERCH, CPA. RMA. PSA
DONNA L. JAPHET, CPA, PSA
JULIUS B . CONSONI. CPA. PSA
ANDREW D. PARENTE. CPA, RMA, PSA
Honorable President and Members of the Board ofTrustees
Harrington Park Board of Education Harrington Park, New Jersey
Report on the Financial Statements
INDEPENDENT AUDITOR'S REPORT
ELIZABETH A . S IIICK. CPA. RMA , PSA
ROilERTW. HAAG. CPA . PSA
DEBORAH K. LERCH.CPA. I'SA
RALPH M. PICONE. CPA. RMA. PSA
DEBRA GOLLE. CPA
CINDY JANACEK. CPA. RMA
MARK SACO. CPA
SIIERYL M. NICOLOSI, CPA. PSA
We have audited the accompanying financial statements of the govemmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the Harrington Park Board ofEducation, as of and for the fiscal year ended June 30, 2017 and the related notes to the financial statements, which collectively comprise the Board of Education's basic financial statements as listed in the table of contents.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America, the standards applicable to financial audits contained in the Government Auditing Standards, issued by the Comptroller General of the United States and audit requirements as prescribed by the Office of School Finance, Department of Education, State of New Jersey. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor 's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
17-17 ROUTE 208 • FAIR LAWN, NJ074 10 • TELEPHONE (201) 791-7100 • FACSIMILE (201 ) 79 1-3035
WWW.LVHCPA.COM I
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the Harrington Park Board of Education as of June 30, 2017, and the respective changes in financial position and, where applicable, cash flows thereof for the fiscal year then ended in accordance with accounting principles generally accepted in the United States of America.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management's discussion and analysis, budgetary comparison information and pension information be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Harrington Park Board of Education's basic financial statements. The introductory section, combining fund financial statements, financial schedules, statistical section, schedule of expenditures of federal awards and schedule of expenditures of state financial assistance as required by New Jersey OMB Circular 15-08, Single Audit Policy for Recipients of Federal Grants. State Grants and State Aid, are presented for purposes of additional analysis and are not a required part of the basic financial statements of the Harrington Park Board of Education.
The combining fund financial statements, schedule of expenditures of federal awards and schedule of expenditures of state financial assistance are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining fund financial statements, schedules of expenditures of federal awards and state financial assistance are fairly stated in all material respects in relation to the basic financial statements as a whole.
The introductory section, financial schedules and statistical section have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them.
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Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated December 4, 2017 on our consideration of the Harrington Park Board of Education's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Harrington Park Board of Education' s internal control over fmancial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Harrington Park Board of Education's internal control over financial reporting and compliance.
Fair Lawn, New Jersey December 4, 20 17
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LERCH, VINCI & HIGGINS, LLP Certified Public Accountants
cou~ •
G ~~ r ary Vlk1iiggins Public School Accountant PSA Number CS00814
MANAGEMENT'S DISCUSSION AND ANALYSIS
HARRINGTON PARK BOARD OF EDUCATION
Management's Discussion and Analysis
Year Ended June 30, 2017
This section of the Harrington Park Board of Education's annual financial report presents our discussion and analysis of the District's financial performance during the fiscal year that ended on June 30, 2017. Please read it in conjunction with the transmittal letter at the front of this report and the District's financial statements, which immediately follows this section.
The Management's Discussion and Analysis (MD&A) is an element of Required Supplementary Information specified in the Governmental Accounting Standard Board's (GASB) Statement No. 34- Basic Financial Statements- and Management's Discussion and Analysis - for State and Local Governments. Certain comparative information between the current year (2016-2017) and the prior year (2015-2016) is required to be presented in the MD&A.
FINANCIAL HIGHLIGHTS
Key financial highlights for the 2016-2017 fiscal year include the following:
• The assets and deferred outflows of resources of the Harrington Park Board of Education exceeded its liabilities and deferred inflows of resources at the close of the fiscal year by $3,069,455 (net position).
• The District's total net position decreased $611,875. • Overall District revenues were $16,686,470 which were $611,875 less than
overall District expenses of $17,298,345. General revenues accounted for $11,807,206 or 71% of all revenues. Program specific revenues in the form of charges for services, grants and contributions account for $4,879,264 or 29% of total revenues.
• The School District had $17,283,912 in expenses for governmental activities; only $4,860,018 of these expenses were offset by program specific charges, grants or contributions. General revenues (predominantly property taxes) of $11,807,206 were adequate to provide for these programs.
• As of the close of the current fiscal year, the District's governmental funds reported combined ending fund balances of$1,149,946. Of that amount, $82,824 (7%) is available for spending at the District's discretion (unassigned fund balance).
• The General Fund unassigned fund balance was $82,824 at June 30, 2017, is a decrease of$141,535 when compared with the beginning balance at July 1, 2016.
• The General Fund unassigned budgetary basis fund balance at June 30, 2017 was $422,403 which represents a decrease of $186,696 compared to the ending budgetary basis fund balance at June 30,2016 of$609,099.
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HARRINGTON PARK BOARD OF EDUCATION
Management's Discussion and Analysis
Year Ended June 30, 2017
OVERVIEW OF THE FINANCIAL STATEMENTS
The financial section of the annual report consists of four parts -Independent Auditor's Report, required supplementary information which includes the management's discussion and analysis (this section), the basic financial statements, and supplemental information. The basic financial statements include two kinds of statements that present different views of the District:
o The first two statements are district wide financial statements that provide both short-term and long-term information about the District's overall financial status.
• The remaining statements are fund financial statements that focus on individual parts of the District, reporting the District's operations in more detail than the district-wide statements.
o The governmental funds statements tell how basic services were financed in the short term as well as what remains for future spending
• Proprietary funds statements offer short-term and long-term financial information about the activities the district operated like businesses.
• Fiduciary funds statements provide information about the financial relationships in which the District acts solely as a trustee or agent for the benefit of others to whom the resources belong.
The basic financial statements also include notes that explain some of the information in the statements and provide more detailed data. The Figure below shows how the various parts of this annual report are arranged and related to one another.
Management's Basic Discussion and Analysis 1-- Financial
Statements
I I I
District-Wide Fund Notes to the Financial Financial Financial
Statements Statements Statements
Summary I~ ~I Detail
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HARRINGTON PARK BOARD OF EDUCATION
Management's Discussion and Analysis
Year Ended June 30, 2017
The following table summarizes the major features of the District's financial statements, including the portion of the District's activities they cover and the types of information they contain. The remainder of this overview section of management's discussion and analysis highlights the structure and contents of each of the statements.
a] or ea ures o M' F t e IS nc- I fth D' t . t W'd e an un man em a emen s dF dF' . I St t t District-Wide Statements Fund Financial Statements
Governmental Funds Proprietary Funds Fiduciary Funds
Scope Entire district The activities of the Activities the district Instances in which (except fiduciary district that are not operates similar to the district funds) proprietary or fiduciary, private businesses; food administers
such as instruction; service. resources on behalf building maintenance, of someone else, transportation, and such as administration. scholm·ship,
donations, student activities, and payroll deductions.
Required Financial Statements of Net Balance Sheet Statement of Net Statements of Statements Position Statement of Revenues, Position Fiduciary Net
Statement of Expenditures and Statement of Revenues, Position Activities Changes in Fund Expenses and Changes Statement of
Balances in Fund Net Position Changes in Statement of Cash Fiduciary Net Flows Position
Accounting Basis Accrual accounting Modified accrual Accrual accounting and Accrual accounting and Measurement and economic accounting and current economic resources and economic Focus resources focus financial focus focus resources focus Type of All assets, liabilities, Generally assets expected All assets, liabilities All assets and Asset/Liability and deferred to be used up and and deferred liabilities both Information outflows/inflows of liabilities that come due outflows/inflows of short and long-term
resources, both during the year or soon resources, both funds do not financial and capital, there after; no capital financial and capital, currently contain short-term and long- assets or long-term short-term and long- capital assets term liabilities included term although they can
Type of All revenues and Revenues for which cash All revenues and All additions and Inflow/Outflow expenses during the is received during or soon expenses during the deductions during Information year, regardless of after the end of the year; year, regardless of the year, regardless
when cash is expenditures when goods when cash is received of when cash is received and the or services have been or paid. received or paid. related liability is received and the related due and payable liability is due and
payable.
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HARRINGTON PARK BOARD OF EDUCATION
Management's Discussion and Analysis
Year Ended June 30, 2017 District-wide Statements
The district-wide statements report information about the District as a whole using accounting methods similar to those used by private-sector companies. The statement of net position includes all of the district's assets, liabilities and deferred outflows/inflows of resources. All of the current year's revenues and expenses are accounted for in the statement of activities regardless of when cash is received or paid.
The two district-wide statements repmi the Districts net position and how they have changed. Net position - the difference between the District's assets, deferred outflows and liabilities, deferred inflows- is one way to measure the District's financial health or position.
• Over time, increases or decreases in the District's net position are an indicator of whether its financial position is improving or deteriorating, respectively.
• To assess the overall health of the District you need to consider additional nonfinancial factors such as changes in the District's property tax base and the condition of school buildings and other facilities.
In the District-wide financial statement's the District's activities are shown in two categories:
• Governmental activities- Most of the District's basic services are included here, such as instruction, support services, operations and maintenance of plant facilities, pupil transportation and extracurricular activities. Property taxes and State and Federal aids finance most of these activities.
• Business-type activities - The District charges fees to customers to help it cover the costs of certain services it provides. The District's Special Milk Program Fund is included here.
Fund Financial Statements
The fund financial statements provide more detailed information about the District's funds - focusing on its most significant or "major" funds - not the district as a whole. Funds are accounting devices the District uses to keep track of specific sources of funding and spending on particular programs.
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HARRINGTON PARK BOARD OF EDUCATION
Management's Discussion and Analysis
Year Ended June 30,2017 The District has three kinds of funds:
•
0
Governmental funds - Most of the District's basic services are included in governmental funds, which generally focus on (1) how cash and other financial assets that can readily be converted to cash, flow in and out and (2) the balances left at year-end that are available for spending. Consequently, the governmental funds statements provide a detailed short-term view that helps to determine whether there are more or fewer financial resources that can be spent in the near future to finance the District's programs. Because this information does not encompass the additional long-term focus of the District-wide statements, we provide additional information at the bottom of the governmental funds statements that explain the relationship (or differences) between them.
Proprietary fimds - Services for which the District charges a fee are generally reported in proprietary funds. Proprietary funds are reported in the same way as the District-wide statements.
o Enterprise Funds - This fund is established to account for operations that are financed and operated in a manner similar to private business enterprises. The stated intent is that costs of providing goods or services to the students on a continuing basis are financed or recovered primarily through user charges. The Distnct currently has one enterprise fund for its food service operations.
• Fiduciary fimds - The District is the trustee, or fiduciary, for assets held in trust for State unemployment insurance claims, joint purchasing contributions for the early warning lightning detection system, payroll and payroll agency funds, and student activity funds. The District is responsible for ensunng that the assets reported in these funds are used for their intended purposes. All of the District's fiduciary activities are reported in a separate statement of fiduciary net position and a statement of changes in fiduciary net position. We exclude these activities from the District's governmentwide financial statements because the District cannot use these assets to finance its operations.
Notes to the Financial Statements
The notes provide additional information that is essential to a full understanding of the data provided in the district-wide and fund financial statements. The notes to the financial statements can be found following the financial statements.
Other Information
In addition to the basic financial statements, this report also presents certain required supplementary information concerning the District's budget process. The District adopts an annual expenditure budget for the general, special revenue and debt service funds. Budgetary comparison statements have been provided for the general and special revenue funds as required supplementary information. The required supplementary information can be found following the notes to the financial statements.
Combining statements and schedules are presented immediately following the major budgetary comparisons.
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Assets
HARRINGTON PARK BOARD OF EDUCATION
Management's Discussion and Analysis
Year Ended June 30, 2017 FINANCIAL ANALYSIS OF THE DISTRICT AS A WHOLE
The district's financial position is the product of several financial transactions including the net results of activities, the acquisition and payment of debt, the acquisition and disposal of capital assets, and the depreciation of capital assets.
The following provides a summary of the school district's net position. The District's combined net position were $3,069,455 and $3,681,330 on June 30, 2017 and 2016, respectively.
Table I Net Position
Governmental Types
Business-Type Activities
Current and other assets Capital assets
$ 1,251,443 $ 8,432,579
9,684,022
1,466,266 $ 7,735,714
9,201,980
7,124 $ 9,129
9,532 1,908
$ 1,258,567 $ 1,475,798 8,441,708 7,737,622
Total assets
Deferred Outflow of Resources
Total Assets and Deferred Outflows of Resources
Liabilities Current liabilities Noncurrent liabilities
Total liabilities
Deferred Inflow of Resources
Total Liabilities and Deferred Inflows
of Resources
Net Position Net Investment in Capital Assets Restricted Unrestricted
2,048,854
11,732,876
150,540 8,529,134
8,679,674
8,679,674
5,936,091 177,707
(3,060,596)
760,100
9,962,080
53,476 6,174,419
6,227,895
64,295
6,292,190
5,714,553 227,582
16,253 II ,440 9,700,275
2,048,854
_.......cl~6,e-c25'-'-3 _.......cl_,_l '"-44.:.::,0 11,749,129
9,129 1,908
150,540 8,529,134
8,679,674
8,679,674
(2,272,245) ---"7 '"-'12'-'-4 ---'-9 '""53'-""2
5,945,220 177,707
(3,053,472)
9,213,420
760,100
9,973,520
53,476 6,174,419
6,227,895
64,295
6,292,190
5,716,461 227,582
(2,262,713)
Total net position $ 3,053,202 $ 3,669,890 $ 16,253 :C$~~1_,_1,"'44'""-0 $ 3,069,455 $ 3,681,330
By far the largest portion of the District's net position reflects its investment in capital assets (e.g., land and improvements, buildings and improvements, vehicles, furniture and equipment); less any related debt used to acquire those assets that are still outstanding. The District uses these capital assets to provide services to its students; consequently, these assets are not available for future spending. Although the District's investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities.
9
HARRINGTON PARK BOARD OF EDUCATION
Management's Discussion and Analysis
Year Ended June 30, 2017
The following shows changes in net position for fiscal years 2017 and 2016.
Table2 Changes in Net Position
Governmental Business~ Type Types Activities Total
2017 2016 2017 2016 2017 2016 Revenues Program revenues
Charges for services and sales $ 281,372 $ 46,077 $ 13,932 $ 14,045 $ 295,304 $ 60,122 Operating grants and contributions 4,578,646 3,326,350 5,314 7,106 4,583,960 3,333,456 Capital grants and contributions 148,240 148,240
General revenues
Property taxes, levied for
general purposes 11,198,697 10,833,817 11,198,697 I 0,833,817 Property taxes levied for debt service 400,358 402,586 400,358 402,586 Federal and State Aid Not Restricted 31,547 29,419 31,547 29,419 Other 176,604 136,252 176,604 136,252
Total revenues 16,667,224 14,922,741 19,246 21,151 16,686,470 14,943,892
Program Expenses Instruction
Regular 7,141,163 6,066,453 7,141,163 6,066,453
Special Education 4,425,278 3,925,687 4,425,278 3,925,687 Other Instruction 199,831 118,783 199,831 118,783 School Sponsored Activities and Athletics 167,867 147,668 167,867 147,668
Support services Student and Instruction Related Services 2,236,932 1,881,192 2,236,932 1,881,192 General Administration Services 509,829 489,569 509,829 489,569 School Administration Services 425,910 395,522 425,910 395,522 Business/Central Services 402,902 337,395 402,902 337,395 Administrative Information Technology 69,840 21,130 69,840 21,130 Operation and Maintenance ofFaqilities 1,445,590 1,263,620 1,445,590 1,263,620 Pupil Transportation 168,198 104,020 168,198 104,020
Debt Service Interest and Other Charges 90,572 91,444 90,572 91,444
Food Service 14,433 15,313 14,433 15,313
Total expenses 17,283,912 14,842,483 14,433 15,313 17,298,345 14,857,796
Change in Net Position (616,688) 80,258 4,813 5,838 (611,875) 86,096
Net Position, Beginning of Year 3,669,890 3,589,632 11,440 5,602 3,681,330 3,595,234
Net Position, End of Year $ 3,053,202 $ 3,669,890 $ 16,253 $ 11,440 $ 3,069,455 $ 3,681,330
10
HARRINGTON PARK BOARD OF EDUCATION
Management's Discussion and Analysis
Year Ended June 30, 2017 Governmental Activities. The District's total governmental activities' revenues, which includes State and Federal grants, were $16,667,224 for the year ended June 30, 2017, property taxes of $11,599,055 represented 70% of revenues. Another significant portion of revenues came from State aid; total State, Federal and Local Aid and Grants were $4,610,193 and represented 28% of revenues. In addition, revenue is earned from tuition and miscellaneous income which includes items such as interest, prior year refunds and other miscellaneous items.
The total cost of all governmental activities programs and services was $17,283,912. The district's expenses are predominantly related to educating and caring for students. Instruction totaled $11,934,139 (69%) of total expenses. Support services, total $5,259,201 (30%) of total expenses. The remaining expenses were for interest costs on long-term debt outstanding.
Total governmental activities expenses exceeded revenues, decreasing net position by $616,688 from the previous year.
Revenues by Type- Governmental Activities For Fiscal Year 2017
Federal, State,
Local Aid and Grants
28%
Other2%
11
HARRINGTON PARK BOARD OF EDUCATION
Management's Discussion and Analysis
Year Ended June 30, 2017 Expenses by Type- Governmental Activities
For Fiscal Year 2017
Student and Instruction
Related Services 13%
PlantOper. &--.._,. Maint. 9%
Administration 8%
Instruction 69%
Net Cost of Governmental Activities. The District's total cost of services for the fiscal year ended June 30, 2017 was $17,283,912. After applying program revenues, derived from operating grants and contributions of $4,860,018 the net cost of services of the District for the fiscal year ended June 30, 2017 is $12,423,894.
Total and Net Cost of Governmental Activities for the Fiscal Years Ended June 30, 2017 and 2016
Instruction
Regular
Special Education Other Instruction School Sponsored Activities and Athletics
Support Services Student and Instruction Related Services General Administration Services
School Administration Services
Central Services Administrative Info Tech
Operation and Maintenance of Facilities Pupil Transportation
Interest on Debt
$
Total Cost of Services 2017 2016
7,141,163 $ 4,425,278
199,831
167,867
2,236,932
509,829
425,910 402,902
69,840
1,445,590
168,198 90,572
6,066,453 $ 3,925,687
118,783
147,668
1,881,192
489,569
395,522 337,395
21 '130
1,263 ,620
104,020 91,444
Net Cost of Services 2017 2016
4,471,145 $ 3,202,406
107,941
167,867
1,751,588
509,829
299,702 402,902
69,840
1,194,783
162,009 83,882
4,166,542 2,940,080
79,262 147,668
1,556,363 489,569
295,525
337,395 21,130
1 ' 1 05,852 98,721 83,709
Total $ 17,283,912 $ 14,842,483 $ 12,423,894 $ 11,321,816
12
HARRINGTON PARK BOARD OF EDUCATION
Management's Discussion and Analysis
Year Ended June 30, 2017
Business-Type Activities The cost of Business-Type Activities for the fiscal year ended June 30, 2017 was $14,433. These costs were funded by charges for services of $13,932 (72%) and operating grants of$5,314 (28%), as detailed in the change in net position schedule.
Total business-type activities revenues exceeded expenses, increasing net position by $4,813 over the previous year.
FINANCIAL ANALYSIS OF THE DISTRICT'S FUNDS
The financial performance of the District as a whole is reflected in its governmental funds as well. As the District completed the year, its governmental funds reported a combined fund balance of $1,149,946 at June 30, 2017 compared to a combined fund balance of $1,453,128 at June 30, 2016.
Revenues for the District's governmental funds were $14,246,235, while total expenditures were $15,604,265.
GENERAL FUND
The General fund includes the primary operations of the District in providing educational services to students from Kindergarten through Grade 8 including pupil transportation, activities and capital outlay projects.
The following schedule presents a summary of General Fund revenues for the fiscal years ended June 30, 2017 and 2016.
Amount of Percent Amount Increase Increase
Revenues 2017 2016 (Decrease) (Decrease)
Local Sources $ 11,653,057 $ 11,016,146 $ 636,911 5.78% State Sources 1,961,032 1,755,792 205,240 11.69%
Total $ 13,614,089 $ 12,771,938 $ 842,151 6.59%
The majority of revenues come from property taxes which accounted for 82% and 85% of total revenue for the years ended June 30, 2017 and 2016, respectively. State sources represented 14% and 14% of total revenue for the fiscal years 2017 and 2016, respectively.
13
HARRINGTON PARK BOARD OF EDUCATION
Management's Discussion and Analysis
Federal, State,
Local Aid and Grants
14%
Year Ended June 30, 2017 General Fund
Revenues by Source
4%
The following schedule presents a summary of General Fund expenditures for the fiscal years ended June 30, 2017 and 2016.
Amount of Amount Increase
Percent Increase
Expenditures 2017 2016 (Decrease} (Decrease}
Current: Instruction $ . 9,494,585 $ 8,857,591 $ 636,994
Support Services 4,199,639 3,871,560 328,079
Debt Service 200,031 10,032 189,999 Capital outlay 1,021 ,864 86,194 935,670
Total $ 14,916,119 $ 12,825,377 $ 2,090,742
Total General Fund expenditures increased $2,090,742 or 16% from the previous year.
For the 2016-2017 school year general expenditures and other financing uses exceeded revenues by $303,182. After adjusting for restricted and assigned fund balances, the unassigned fund balance decreased from $224,359 at June 30, 2016 to $82,824 at June 30, 2017. In addition, the district ended the year with $407,171 of excess surplus of which $55,106 was designated for the 2017/2018 school year budget. The remaining excess surplus balance of $352,065 is required to be appropriated in the 2018/2019 school year budget.
The primary reason for the increase in General Fund expenditures was the acquisition of modular classrooms through a lease purchase agreement in the amount of $972,663 .
14
7.19% 8.47%
1893.93% 1085.54%
16.30%
HARRINGTON PARK BOARD OF EDUCATION
Management's Discussion and Analysis
Year Ended June 30, 2017 CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital Assets. At the end of fiscal years 2017 and 2016, the school district had invested in land, buildings and improvements, furniture, machinery and vehicles as follows:
Governmental Business~ Type
Activities Activities Total
2017 2016 2017 2016
Land $ 504,400 $ 504,400 $
Buildings and Improvements 15,914,018 14,941,355
Furniture, Equipment and Vehicles 700,266 656,837 $ 15,490 $ 7,828
17,118,684 16,102,592 15,490 7,828 Less Depreciation (8,686,105) (8,366,878) (6,361) (5,920)
Total Capital Assets, Net of Depreciation $ 8,432,579 $ 7,735,714 $ 9,129 $ 1,908 $
Additional information on the District's capital assets is presented in Note 3 of this report.
2017
504,400
15,914,018
715,756
17,134,174 (8,692,466)
8,441,708
Debt Administration. As of June 30, 2017 and 2016 the school district had long-term debt and outstanding long-term liabilities in the amount of $8,529,134 and $6,174,419 as follows:
Outstanding Long-Term Liabilities As of June 30, 2017 and 2016
Serial Bonds Payable Capital Leases Payable Net Pension Liability Compensated Absences
Total
$ 1,703,000 $ 818,576
5,827,841 179,717
$ 8,529,134 $
2,002,000 19,161
3,998,922 154,336
6,174,419
Additional information on the District's long-term liabilities is presented in Note 3 of this report.
15
$
$
2016
504,400
14,941,355
664,665
16,110,420 (8,372,798)
7,737,622
HARRINGTON PARK BOARD OF EDUCATION
Management's Discussion and Analysis
Year Ended June 30, 2017 GENERAL FUND BUDGETARY HIGHLIGHTS
General Fund budgetary basis expenditures and other financing uses exceeded budgetary basis revenues and other financing sources decreasing budgetary basis fund balance by $348,343 from the previous year. After deducting restricted and designated fund balances, the unassigned budgetary fund balance decreased $186,696 from $609,099 at June 30, 2016 to $422,403 at June 30, 2017. In addition, the District has established a capital reserve and a maintenance reserve in the amounts of $50,100 and $176,994, respectively. In addition, the District ended the year with excess surplus of $407,171. Of this amount, $55,106 was the excess resulting from the prior 2015/2016 school year and the remaining $352,065 was the excess resulting from the current 2016/2017 school year. In accordance with State regulations, the District appropriated the $55,106 of excess surplus for use in the 2017/2018 school year budget as required.
ECONOMIC FACTORS AND NEXT YEAR'S BUDGET
While many factors influence the District's future, the availability of State funding, special education needs, capital improvements, student enrollment and the economy will have the most impact on educational and fiscal decisions in the future.
Many factors were considered by the District's administration during the process of developing the fiscal year 2017-2018 budget. The primary factors were the District's projected student population, anticipated state and federal aid, contractual salary and related benefit cost increases, as well as, increased special education tuition costs.
These indicators were considered when adopting the budget for fiscal year 2017-2018. Budgeted expenditures in the General Fund increased approximately 2% to $12,680,261 for fiscal year 2017-2018.
16
HARRINGTON PARK BOARD OF EDUCATION
Management's Discussion and Analysis
Year Ended June 30, 2017
CONTACTING THE DISTRICT'S FINANCIAL MANAGEMENT
This financial report is designed to provide our citizens, taxpayers, customers, and investors and creditors with a general overview of the District's finances and to demonstrate the District's accountability for the money it receives. If you have questions about this report or need additional financial information contact the Business Office, Harrington Park Board of Education, Administrative Offices, 191 Harriot Avenue, Harrington Park, New Jersey 07640
17
BASIC FINANCIAL STATEMENTS
EXHIBIT A-I
HARRINGTON PARK BOARD OF EDUCATION
STATEMENT OF NET POSITION
AS OF JUNE 30,2017
Governmental Business-Type Activities Activities Total
ASSETS
Cash and Cash Equivalents $ 1,191,476 $ 6,712 $ 1,198,188
Receivables, net 50,211 412 50,623
Prepaid Items 9,756 9,756
Capital Assets, net
Not Being Depreciated 504,400 504,400 Being Depreciated 7,928,179 9,129 7,937,308
Total Assets 9,684,022 16,253 9,700,275
DEFERRED OUTFLOWS OF RESOURCES
Deferred Amounts on Refunding of Debt 25,088 25,088 Deferred Amounts on Net Pension Liability 2,023,766 2,023,766
Total Deferred Outflows of Resources 2,048,854 2,048,854
Total Assets and Deferred Outflows of Resources I 1,732,876 16,253 11,749,129
LIABILITIES
Accounts Payable and Other Current Liabilities 100,220 100,220
Accrued Interest Payable 49,043 49,043
Unearned Revenue 1,277 1,277
Noncurrent Liabilities
Due within one year 615,210 615,210 Due beyond one year 7,913,924 7,913,924
Total Liabilities 8,679,674 8,679,674
NET POSITION
Net Investment in Capital Assets 5,936,091 9,129 5,945,220
Restricted for
Capital Projects 52,457 52,457
Maintenance Reserve 125,250 125,250 Unrestricted (3,060,596) 7,124 (3,053,472)
Total Net Position $ 3,053,202 $ 16,253 $ 3,069,455
The accompanying Notes to the Financial Statements are an integral part of this statement.
18
EXHIBIT A-2
HARRINGTON PARK BOARD OF EDUCATION
STATEMENT OF ACTIVITIES FOR THE FISCAL YEAR ENDED JUNE 30, 2017
Net (Expenses) Revenues and Program Revenues Changes in Net Position
Operating Capital Charges for Grants and Grants and Governmental Business-Type
Functions/Programs Expenses Services Contributions Contributions Activities Activities Total Governmental Activities
Instruction Regular $ 7,141,163 $ 41,372 $ 2,628,646 $ (4,471,145) $ (4,471,145) Special Education 4,425,278 1,222,872 (3,202,406) (3,202,406) Other Instruction 199,831 91,890 (107,941) (107,941) School Sponsored Activities and Athletics 167,867 (167,867) (167,867)
Support Services Student and Instruction Related Services 2,236,932 485,344 (1,751,588) (1,751,588) General Administration Services 509,829 (509,829) (509,829) School Administration Services 425,910 126,208 (299,702) (299,702) Business/Central Services 402,902 (402,902) (402,902) Administrative Info Tech 69,840 (69,840) (69,840) Operation and Maintenance ofF acilities 1,445,590 240,000 10,807 (1,194,783) (1,194,783) Pupil Transportation 168,198 6,189 (162,009) (162,009)
Interest on Debt 90,572 6,690 $ (83,882) (83,882)
Total Governmental Activities 17,283,912 281,372 4,578,646 (12,423,894) (12,423,894)
:;; Business-Type Activities
Food Service 14,433 13,932 5,314 $ 4,813 4,813
Total Business-Type Activities 14,433 13,932 5,314 4,813 4,813
Total Primary Government $ 17,298,345 $ 295,304 $ 4,583,960 $ 02,423,894) 4,813 (12,419,081)
General Revenues Property Taxes, Levied for General purposes 11,198,697 11,198,697 Property Taxes Levied for Debt Service 400,358 400,358 State Aid- Unrestricted 31,547 31,547 Miscellaneous Revenues 172,988 172,988
Gain on Disposal of Capital Assets 3 616 3,616
Total General Revenues and Other Items 11,807,206 11,807,206
Change in Net Position (6!6,688) 4,813 {611,875)
Net Position, Beginning of Year 3,669,890 11,440 3,681,330
Net Position, End of Year $ 3,053,202 $ 16,253 $ 3,069,455
The accompanying Notes to the Financial Statements are an Integral Part of this Statement
FUND FINANCIAL STATEMENTS
HARRINGTON PARK BOARD OF EDUCATION GOVERNMENTAL FUNDS
BALANCE SHEET AS OF JUNE 30, 2017
Special General Revenue
Fund Fund ASSETS
Cash and Cash Equivalents $ 1,187,842 $ 1,277 Receivables from:
Intergovernmental 18,538 Other 12,922
Due from Other Funds 18,751 Prepaid Items 9,756
Total Assets $ 1,247,809 $ 1,277
LIABILITIES AND FUND BALANCES Liabilities Accounts Payable $ 91,036 Due to Other Funds 9,184 Unearned Revenue $ 1,277
Total Liabilities 100,220 1,277
Fund Balances Restricted Fund Balance
Excess Surplus 352,065 Excess Surplus - Designated for
Subsequent Year's Expenditures 55,106 Capital Reserve 50,100 Emergency Reserve 176,994
Maintenance Reserve 125,250 Capital Projects
Assigned Year Encumbrances 90,322 Designated for Subsequent
Y car's Expenditures 214,928 Unassigned 82,824
Total Fund Balances 1,147,589
Total Liabilities and Fund Balances $ 1,247,809 $ 1,277
The accompanying Notes to the Financial Statements are an h1tebrral Part of this Statement 20
Capital Projects
Fund
$
$
$
$
EXHIBIT B-1
Debt Total Service Governmental Fund Funds
2,357 $ 1,191,476
18,538 12,922 18,751
$ 9,756
2,357 $ $ 1,251,443
$ 91,036 9,184
$ 1,277
101,497
352,065
55,106 50,100
176,994
125,250 2,357 2,357
90,322
214,928 82,824
2,357 1,149,946
2,357 $ $ 1,251,443
HARRINGTON PARK BOARD OF EDUCATION
GOVERNMENTAL FUNDS BALANCE SHEET
Total Fund Balances (Exhibit B-1)
Amounts reported for governmental activities in the statement of net position (A-I) are different because;
Capital assets used in governmental activities are not financial resources and therefore are not reported in the funds. The cost of the assets is $17,1 18,684 and the accumulated depreciation is $8,686,105.
Certain amounts resulted from the measurement of the net pension liability are reported as either deferred inflows of resources or deferred outtlows of resources on the statement of net pension and deferred over future years.
AS OF JUNE 30,2017
Deferred Outflows of Resources
The District ha'> financed capital assets through the issuance of serial bonds and longMterm lease obligations. The interest accrual at year end is:
Amounts resulting from the refunding of debt arc reported as deferred outflows of resources on the statement of net position and amortized over the life of the debt.
LongMterm liabilities are not due and payable in the current period and therefore are not reported as liabilities in the funds
Serial Bonds Payable
Capital Leases Payable Compensated Absences Payable
Net Pension Liability
Net position of governmental activities
The accompanying Notes to the Financial Statements are an Integral Part of this Statement 21
(1,703,000)
(818,576)
(179,717)
(5,827,841)
$
$
EXHIBIT R-I
1,149,946
8,432,579
2,023,766
(49,043)
25,088
(8,529,134)
3,053,202
EXIIIBIT B-2
HARRINGTON PARK BOARD OF EDUCATION
GOVERNMENTAL FUNDS
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
FOR THE FISCAL YEAR ENDED .JIJNE 30, 2017
Special Capital Debt Total General Revenue Projects Service Governmental
Fund Fund Fund Fund Funds
REVENUES Local Sources
Property Tax Levy $ 11,198,697 $ 400,358 $ 11,599,055
Rentals 240,000 240,000 Miscellaneous 214,360 $ 33,166 247,526
Total -Local Sources 11,653,057 33,166 400,358 12,086,581
State Sources 1,961,032 35,911 1,996,943 Federal Sources 162,711 162,711
Total Revenues 13,614,089 195,877 436,269 14,246,235
EXPENDITURES
Current
Regular Instruction 5,428,847 5,428,847
Special Education Instruction 3,793,034 Ill, 151 3,904,185
Other Instruction 129,774 28,800 158,574
School-Sponsored Activities and Athletics 142,930 142,930
Support Services Student and Instruction Related Services 1,788,051 55,926 1,843,977
General Administration Services 410,063 410,063
School Administration Services 333,946 333,946
Central Services 348,545 348,545
Administrative Info Tech 69,840 69,840
Plant Operations and Maintenance 1,085,259 1,085,259
Pupil Transportation 163,935 163,935
Debt Service Principal 199,433 355,000 554,433
Interest and Other Charges 598 81,269 81,867
Cost of Issuance 30,912 30,912
Advanced Refunding Escrow 25,088 25,088
Capital Outlay 1,021,864 1,021,864
Total Expenditures 14,916,119 195,877 492,269 15,604,265
Excess (Deficit) of Revenues Over (Under) Expenditures (1,302,030) (56,000) (1,358,030)
OTHER FINANCING SOURCES (USES)
Payment to Refunding Bond Escrow Agent (1,277,000) (1,277,000)
Refunding Bond Proceeds 1,333,000 1,333,000
Capital Leases 998,848 998,848
Total Other Financing Sources and Uses 998,848 56,000 1,054,848
Net Change in Fund Balances (303,182) (303,182)
Fund Balance, Beginning of Year 1,450,771 $ 2,357 1,453,128
Fund Balance, End of Year $ 1,147,589 $ $ 2,357 $ $ 1,149,946
The accompanying Notes to the Financial Statements are an Integral Part of this Statement 22
HARRINGTON PARK BOARD OF EDUCATION RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF
REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES WITH THE DISTRICT-WIDE STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2017
Total net change in fund balances ~ governmental funds (Exhibit B-2)
Amounts reported for governmental activities in the statement of activities are different because:
Capital Outlays are reported in governmental funds as expenditures. However, in the statement of activities, the cost of those assets is allocated over their estimated useful lives as depreciation expense. This is the amount by which the capital outlay additions exceed depreciation in the period
Depreciation Expense $ (328,615) Capital Outlays
The net effect of various miscellaneous transactions involving capital assets (i.e., sales, disposals, donations) is to increase net position. These transactions are not reported in the governmental fund financial statements
Gain on Disposal 'of Capital Assets
The issuance of long-term debt (e.g. bonds, leases) provides current financial resources to governmental funds, while the repayment of the principal of long-term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net position. This amount is the net effect
of these differences in the treatment of long-term debt and related items.
Payments to Escrow Agent for Refunding Principal Repayments:
Serial Bonds Payable Capital Leases Payable
Debt Issued: Refunding Bonds Capital Leases
Governmental funds report the effect of discounts and losses on the refunding of debt when debt is first issued whereas these amounts are deferred and amortized in the statement of activities. This amount is the net effect of these differences.
1,021,864
1,277,000
355,000 199,433
Deferred Amounts on Refunding of Debt- Net of Amortization
In the statement of activities, certain operating expenses, e.g., compensated absences and pension expense are measured by the amounts earned or accrued during the year. In the governmental funds, however, expenditures for these items are reported in the amount of financial resources used (paid). When the earned amount exceeds the paid amount, the difference is reduction in the reconciliation (-); when the paid amount exceeds the earned amount the difference is an addition to the reconciliation(+).
Increase in Compensated Absences Increase in Pension Expense
In the statement of activities, interest on long-term debt in the statement of activities is accrued, regardless of when due. In the governmental funds, interest is reported when due. An increase in accrued interest is a decrease in the reconciliation and a decrease in accrued interest is an increase.
Increase in Accrued Interest
Change in net position of governmental activities
The accompanying Notes to the Financial Statements are an Integral Part of this StatelJlent 23
(25,381) (500,958)
$
$
EXHIBIT B-3
(303,182)
693,249
3,616
1,831,433
(I ,333,000) (998,848)
25,088
(526,339)
(8,705)
(616,688)
HARRINGTON PARK BOARD OF EDUCATION PROPRIETARY FUND
ENTERPRISE FUND STATEMENT OF NET POSITION
ASSETS
Current Assets Cash and Cash Equivalents Intergovernmental Receivable
Federal
Total Current Assets
Capital Assets Equipment Less: Accumulated Depreciation
Total Capital Assets
Total Assets
NET POSITION
Net Investment in Capital Assets Unrestricted
AS OF JUNE 30,2017
$
EXHIBIT B-4
Special Milk
Program
6,712
412
7,124
15,490 (6,361)
9,129
16,253
9,129 7,124
Total Net Position $ 16,253
The accompanying Notes to the Financial Statements are an Integral Part of this Statement 24
HARRINGTON PARK BOARD OF EDUCATION PROPRIETARY FUND
ENTERPRISE FUND STATEMENT OF REVENUES, EXPENSES AND
CHANGES IN NET POSITION FOR THE FISCAL YEAR ENDED JUNE 30, 2017
OPERATING REVENUES Charges for Services
Daily Sales
Total Operating Revenues
OPERATING EXPENSES Salaries, Wages and Payroll Taxes Cost of Sales Supplies Depreciation
Total Operating Expenses
Operating Loss
NONOPERATING REVENUES Federal Sources
Special Milk Program
Total Nonoperating Revenues
Change in Net Position
Net Position, Beginning of Year
Net Position, End of Year
The accompanying Notes to the Financial Statements are an Integral Part of this Statement 25
$
$
EXHIBIT B-5
Special Milk
Program
13,932
13,932
4,789 8,481
722 441
14,433
(501)
5,314
5,314
4,813
11,440
16,253
EXHIBITB-6
HARRINGTON PARK BOARD OF EDUCATION
PROPRIETARY FUND
ENTERPRISE FUND
STATEMENT OF CASH FLOWS
FOR THE FISCAL YEAR ENDED JUNE 30, 2017
Cash Flows from Operating Activities
Cash Received from Customers
Cash Payments to Suppliers for Salaries and Wages,
and Benefits Cash Payments to Suppliers for Goods and Services
Net Cash Used by Operating Activities
Cash Flows from Noncapital Financing Activities Cash Received from State and Federal Subsidy Reimbursements
Net Cash Provided by Noncapital Financing Activities
Cash Flows from Capital and Related Financing Activities Purchase of Capital Assets
Net Cash Used by Investing Activities
Net Decrease in Cash and Cash Equivalents
Cash and Cash Equivalents, Beginning of Year
Cash and Cash Equivalents; End of Year
Reconciliation of Operating Loss to Net Cash
Used by Operating Activities Operating Loss
Adjustments to Reconcile Operating Loss to
Net Cash Used by Operating Activities Depreciation
Total Adjustments
Net Cash Used by Operating Activities
$
$
$
$
The accompanying Notes to the Financial Statements are an Integral Part of this Statement 26
Special
Milk Program
13,932
(4,789) (9,203)
(60)
6,176
6,176
(7,662)
(7,662)
(1,546)
8,258
6,712
(501)
441
441
(60)
HARRINGTON PARK BOARD OF EDUCATION FIDUCIARY FUNDS
STATEMENT OF FIDUCIARY NET POSITION AS OF JUNE 30, 2017
Lightning Unemployment Detection Private
Compensation Trust Purpose Trust Fund
ASSETS Cash and Cash Equivalents $ 78,331 $ 7,711 Due from Other Funds 9,184
Total Assets 87,515 7,711
LIABILITIES Accounts Payable 4,512 149 Payroll Deductions and Withholdings Flexible Spending Benefits Due to Student Groups Due to Other Funds 5,712
Total Liabilities 10,224 149
NET POSITION
Held in Trust for Unemployment Claims and Other Purposes $ 77,291 $ 7,562
The accompanying Notes to the Financial Statements are an Integral Part of this Statement 27
EXHIBITB-7
Agency Fund
$ 65,034 5,712
$ 70,746
23,526 18,446 10,023 18,751
$ 70,746
HARRINGTON PARK BOARD OF EDUCATION FIDUCIARY FUNDS
STATEMENT OF CHANGES IN FIDUCIARY NET POSITION FOR THE FISCAL YEAR ENDED JUNE 30,2017
EXHIBITB-8
Lightning Detection Unemployment Private Purpose
ComJ!ensation Trust Trust Fund ADDITIONS
Contributions Employees $ 11,259 District 261 Member Entities $ 10,584
Miscellaneous 2,772
Total Additions 11,520 13,356
DEDUCTIONS Lightning Detection Expenditures 8,279 Unemployment Claims and Contributions 4,773
Total Deductions 4,773 8,279
Change in Net Position 6,747 5,077
Net Position, Beginning of Year 70 544 2 485
Net Position, End of Year $ 77,291 $ 7,562
The accompanying Notes to the Financial Statements are an Integral Part of this Statement 28
NOTES TO THE FINANCIAL STATEMENTS
HARRINGTON PARK BOARD OF EDUCATION NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2017
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Reoorting Entity
The Harrington Park Board of Education (the "Board" or the "District") is an instrumentality of the State of New Jersey, established to function as an education institution. The Board consists of five elected officials and is responsible for the fiscal control of the District. A superintendent is appointed by the Board and is responsible for the administrative control of the District. Under existing statutes, the Board's duties and powers include, but are not limited to, the development and adoption of a school program; the establishment, organization and operation of schools; and the acquisition, maintenance and disposition of school property.
The Board also has broad fmancial responsibilities, including the approval of the annual budget and the establishment of a system of accounting and budgetary controls.
The reporting entity is composed of the primary government, and other organizations that are included to ensure that the financial statements of the District are not misleading. The primary government consists of all funds, departments, boards and agencies that are not legally separate from the District. For the Harrington Park Board of Education this includes general operations, special milk and student related activities of the District.
Component units are legally separate organizations for which the District is fmancially accountable. The District is financially accountable for an organization if the District appoints a voting majority of the organization's governing board and (1) the District is able to significantly influence the programs or services performed or provided by the organization; or (2) the District is legally entitled to or can otherwise access the organization's resources; the District is legally obligated or has otherwise assmned the responsibility to finance the deficits of, or provide financial support to, the organization; or the District is obligated for the debt of the organization. Component units may also include organizations that are fiscally dependent on the District in that the District approves the budget, the issuance of debt or the levying of taxes. Based on the foregoing criteria, the District has no component units. Furthermore, the District is not includable in any other reporting entity as a component unit.
B. New Accounting Standards
During fiscal year 2017, the District adopted the following GASB statements:
• GASB No. 73, Accounting and Financial Reporting for Pensions and Related Assets that Are Not Within the Scope ofGASB Statement 68, and Amendments to Certain Provisions ofGASB Statements 67 and 68. The objective ofthis Statement is to improve the usefulness of information about pensions included in the general purpose external fmancial reports of state and local governments for making decisions and assessing accountability.
• GASB No. 77, Tax Abatement Disclosures. The requirements of this Statement will improve financial reporting by providing disclosure of information about the nature and magnitude of tax abatements that will make these transactions more transparent to fmancial statement users. As a result, users will be better equipped to understand (1) how tax abatements affect a government's future ability to raise resources and meet its financial obligations and (2) the impact those abatements have on a government's fmancial position and economic condition.
• GASB No. 80, Blending Requirements for Certain Component Units - An Amendment of GASB Statement No. 14. The objective of this Statement is to improve fmancial reporting by clari:t'ying the financial statement presentation requirements for certain component units. This Statement amends the blending requirements established in paragraph 53 of Statement No. 14. The Financial Reporting Entity, as amended.
29
HARRINGTON PARK BOARD OF EDUCATION NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30,2017
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
B. New Accounting Standards (Continued)
• GASB No. 82, Pension Issues- An Amendment of GASB Statements No. 67, No. 68, and No. 73. The objective of this Statement is to address certain issues that have been raised with respect to Statements No. 67, Financial Reporting for Pension Plans, No. 68, Accounting and Financial Reporting for Pension, and No. 73, Accounting and Financial Reporting for Pensions and Related Assets That are Not Within the Scope of GASB Statement 68, and Amendments to Certain Provisions of GASB Statements 67 and 68. Specifically, this Statement addresses issues regarding (I) the presentation of payroll-related measures in required supplementary information, (2) the selection of assumptions and the treatment of deviations from the guidance in an Actuarial Standard of Practice for financial reporting purposes, and (3) the classification of payments made by employers to satisfy employee (plan member) contribution requirements.
Other accounting standards that the District is currently reviewing for applicability and potential impact on the financial statements include:
• GASB No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions, will be effective beginning with the fiscal year ending June 30, 2018. The primary objective of this Statement is to improve accounting and fmancial reporting by state and local govermnents for postemployment benefits other than pensions (other postemployment benefits or OPEB). It also improves information provided by state and local govermnental employers about financial support for OPEB that is provided by other entities.
• GASB No. 84, Fiduciary Activities, will be effective with the fiscal year ending June 30, 2020. The objective of this Statement is to improve guidance regarding the identification of fiduciary activities for accounting and fmancial reporting purposes and how those activities should be reported. This Statement established criteria for identifying fiduciary activities of all state and local govermnents.
• GASB No. 85, Omnibus 2017, will be effective with the fiscal year ending June 30, 2018. The objective of this Statement is to address practice issues that have been identified during implementation and application of certain GASB Statements. This Statement addresses a variety of topics including issues related to blending component units, goodwill, fair value measurement and application, and post-employment benefits (pensions and other postemployment benefits (OPEB)).
• GASB No. 86, Certain Debt Extinguishment Issues, will be effective with the fiscal year ending June 30, 2018. The primary objective of this Statement is to improve consistency in accounting and fmancial reporting for in-substance defeasance of debt by providing guidance for transactions in which cash and other monetary assets acquired with only existing resources - resources other than the proceeds of refunding debt are placed in an irrevocable trust for the sole purpose of extinguishing debt. This Statement also improves accounting and fmancial reporting for prepaid insurance on debt that is extinguished and notes to fmancial statements for debt that is defeased in substance.
• GASB No. 87, Leases, will be effective with the fiscal year ending June 30, 2021. The objective of this Statement is to better meet the information needs of fmancial statement users by improving accounting and financial reporting for leases by govermnents. This Statement increases the usefulness of govermnents' fmancial statements by requiring recognition of certain lease assets and liabilities for leases that previously were classified as operating leases and recognized as inflows of resources or outflows of resources based on the payment provisions of the contract.
C. Basis of Presentation- Financial Statements
The fmancial statements include both district-wide fmancial statements (based on the District as a whole) and fund financial statements (based on specific District activities or objectives). Both the district-wide and fund financial statements categorize activities as either govermnental activities or business-type activities. While separate district-wide and fund financial statements are presented, they are interrelated. In the district-wide fmancial statements, the govermnental activities column incorporates data from govermnental funds, while business-type activities incorporate data from the District's enterprise funds. Fiduciary funds are excluded from the district-wide fmancial statements.
30
HARRINGTON PARK BOARD OF EDUCATION NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30,2017
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
C. Basis of Presentation- Financial Statements (Continued)
District-Wide Financial Statements
The district-wide financial statements (i.e., the statement of net position and the statement of activities) report information on all of the nonfiduciary activities of the Board of Education. All fiduciary activities are reported only in the fund fmancial statements. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities, which normally are supported by property taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. In the statement of net position, both the governmental and business-type activities columns (a) are presented on a consolidated basis by column, and (b) reflect on a full accrual economic resource basis, which incorporates long-term assets and receivables as well as long-term debt and obligations.
The statement of activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1) charges to customers or other governmental entities, including other school districts, who purchase, use, or directly benefit from goods or services provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Property taxes, unrestricted state aid and other items not properly included among program revenues are reported instead as general revenues.
As a general rule the effect of interfund activity has been eliminated from the district-wide financial statements. Exceptions to this general rule are charges between the Board's proprietary and fiduciary funds since elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned.
Fund Financial Statements
Separate fund fmancial statements are provided for governmental, proprietary, and fiduciary activities, even though the latter are excluded from the district-wide financial statements. The emphasis of fund financial statements is on major individual governmental and enterprise funds, each reported as separate columns in the fund fmancial statements. All remaining governmental and enterprise funds are aggregated and reported as nomnajor funds. The District considers all of its governmental and enterprise funds to be major funds.
The District reports the following major governmental funds:
The general fond is the School District's primary operating fund. It accounts for all financial resources of the District, except those to be accounted for in another fund.
The special revenue fond accounts for the proceeds of specific revenue sources legally restricted to expenditures for specified purposes. This fund accounts for federal, state and local financial programs, with the exception of grants for major capital projects and the child nutrition programs.
The capital projects fond accounts for the proceeds from the sale of bonds, lease purchases and other revenues used for the acquisition or construction of capital facilities and other capital assets, other than those fmanced by the proprietary funds.
The debt service fond accounts for the accumulation of resources that are restricted, committed or assigned for the payment of principal and interest on long-term general obligation debt of governmental funds.
31
HARRINGTON PARK BOARD OF EDUCATION NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2017
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
C. Basis of Presentation- Financial Statements (Continued)
Fund Financial Statements (Continued)
The District reports the following major proprietary fund which is organized to be self-supporting through user charges:
The special milk fond accounts for the activities of the school cafeteria, which provides milk to students.
Additionally, the government reports the following fund types:
The fiduciary trust fond is used to account for resources legally held in trust for the state unemployment insurance claims, joint purchase contributions for the early warning lightning detection system, payroll related activities and student related activities which are supported and controlled by student organizations and clubs. All resources of the fund, including any earnings on invested resources, may be used to support the intended purpose. There is no requirement that any portion of these resources be preserved as capital.
Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as either "due to/from other funds" (i.e., the current portion of interfund loans) or "advances to/from other funds" (i.e., the non-current portion of interfund loans). All other outstanding balances between funds are reported as "due to/from other funds". Any residual balances outstanding between the governmental activities and business-type activities are reported in the district-wide financial statements as "internal balances".
Reclassifications
Certain amounts presented in the prior year data may have been reclassified in order to be consistent with the current year's presentation.
D. Measurement Focus and Basis of Accounting
The accounting and financial reporting treatuaent is determined by the applicable measurement focus and basis of accounting. Measurement focus indicates the type of resources being measured such as current financial resources or economic resources. The basis of accounting indicates the timing of transactions or events for recognition in the financial statements.
The district-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund and fiduciary fund financial statements with the exception of the agency fund which does not have a measurement focus. All assets, all liabilities and all deferred outflows/inflows of resources associated with these operations (with the exception of the fiduciary funds) are included on the Statement of Net Position. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met.
32
HARRINGTON PARK BOARD OF EDUCATION NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30,2017
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
D. Measurement Focus and Basis of Accounting (Continued)
Governmental fund fmancial statements are reported using the current fmancial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized when susceptible to accrual (i.e. when they are both measurable and available). Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the Board considers revenues to be available if they are collected within 60 days after year-end. Expenditures are recorded when a liability is incurred, as under accrual basis of accounting, with the exception of debt service expenditures as well as expenditures related to compensated absences and claims and judgments which are recorded only when payment is due. General capital asset acquisitions are reported as expenditures in governmental funds. Issuance of long-term debt and acquisitions under capital leases are reported as other fmancing sources.
Property taxes, tuition and unrestricted state aid associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Entitlements (formula-type grants and aid) are recorded as revenues when all eligibility requirements are met, including any time requirements, and the amount is received during the period or within the availability period for this revenue source. Expenditure-driven grants and similar awards (reimbursement-type grants and awards) are recognized as revenue when the qualifYing expenditures have been incurred and all other eligibility requirements imposed by the grantor or provider have been met, and the amount is received during the period or within the availability period for this revenue source. All other revenue items are considered to be measurable and available only when cash is received by the District.
When both restricted and unrestricted resources are available for use, it is the Board's policy to use restricted resources first, then unrestricted resources as they are needed.
E. Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Net Position/Fund Balance
1. Cash, Cash Equivalents and Investments
Cash and cash equivalents are considered to be cash on hand, demand deposits, and short-term investments with original maturities of three months or less from the date of acquisition.
Investments are reported at fair value and are limited by N.J.S.A. 18A:20-37.
2. Receivables
All receivables are reported at their gross value, and where appropriate, are reduced by the estimated portion that is expected to be uncollectible.
3. Inventories
The cost of inventories of the governmental fund types are recorded as expenditures at the time individual inventory items are purchased.
4. Prepaid Items
Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both district-wide and fund fmancial statements. The cost of prepaid items is recorded as expenditures/expenses when consumed rather than when purchased.
33
HARRINGTON PARK BOARD OF EDUCATION NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30,2017
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
E. Assets. Liabilities. Deferred Outflows/Inflows of Resources, and Net Position/Fond Balance (Continued)
5. Capital Assets
Capital assets, which include property, plant and equipment, are reported in the applicable governmental or business-type activities columns in the district-wide fmancial statements. Capital assets are defined by the Board as assets with an initial, individual cost of $2,000 and an estimated useful life in excess of two years. The District was able to estimate the historical cost for the initial reporting of these capital assets through back trending. As the District constructs or acquires additional capital assets each period, they are capitalized and reported at historical cost. Donated capital assets are recorded at acquisition value at the date of donation. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend its useful life are not capitalized.
Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of capital assets of business-type activities is included as part of the capitalized value of the assets constructed.
Land and construction in progress are not depreciated. The other property, plant, and equipment of the District, is depreciated using the straight line method over the following estimated useful lives:
Land Improvements Buildings Building Improvements Office Equipment and Furniture Computer Equipment
6. Deferred Outflows of Resources
20 7-40 7-40 5-20 5-20
In addition to assets, the statement of fmancial position will sometimes report a separate section for deferred outflows of resources. This separate fmancial statement element, deferred outflows of resources, represents a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. The Board has two items which arise only under the accrual basis of accounting that qualify for reporting in this category. One item is the deferred amounts on refunding of debt which results from the loss on a debt refunding reported in the district-wide statement of net position. Deferred amounts on debt refunding result from the loss on the transaction when the debt's reacquisition price is greater than the carrying value of the refunded debt. These amounts are deferred and amortized over the shorter of the life of the refunded or refunding debt. The other item that qualifies for reporting in this category is the deferred amounts on net pension liability. Deferred amounts on net pension liability are reported in the district-wide statement of net position and result from: (I) differences between expected and actual experience; (2) changes in assumptions; (3) net difference between projected and actual investment earnings on pension plan investments; ( 4) changes in proportion and differences between employer contributions and proportionate share of contributions; and (5) contributions made subsequent to the measurement date. These amounts are deferred and amortized over future years.
7. Compensated Absences
It is the District's policy to permit employees to accumulate (with certain restrictions) earned but unused vacation and sick leave benefits. A long-term liability of accmnulated vacation and sick leave and salary related payments has been recorded in the governmental activities in the district-wide fmancial statements, representing the Board's commitment to fund such costs from future operations. A liability is reported in the governmental funds only to the amount actually due at year end as a result of employee resignations and retirements.
34
HARRINGTON PARK BOARD OF EDUCATION NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30,2017
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
E. Assets. Liabilities, Deferred Outflows/Inflows of Resources, and Net Position/Fund Balance (Continued)
8. Pensions
In the district-wide financial statements, for purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the retirement systems sponsored and administered by the State of New Jersey and additions to/deductions from these retirement systems' fiduciary net position have been determined on the same basis as they are reported by the retirement systems. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value.
In the governmental fund financial statements, net pension liabilities represent amounts normally expected to be liquidated with expendable available financial resources for required pension contributions that are due and payable at year end. Pension expenditures are recognized based on contractual pension contributions that are required to be made to the pension plan during the fiscal year.
9. Long-Term Obligations
In the district-wide financial statements, and proprietary fund types in the fund fmancial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type statement of net position. Losses resulting from debt refundings are reported as deferred outflows of resources. Losses resulting from debt refundings are also deferred and amortized over the life of the refunded bonds or new bonds whichever is less using the effective interest method. Bonds payable are reported including the unamortized bond premium or discount. Bond issuance costs (other than for prepaid insurance) are treated as an expense.
In the fund fmancial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other fmancing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other fmancing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures.
10. Net Position/Fund Balance
District-Wide Statements
In the district-wide statements, there are three classes of net position:
• Net Investment in Capital Assets- consists of net capital assets (cost less accumulated depreciation) reduced by outstanding balances of related debt obligations from the acquisition, construction or improvement of those assets. Deferred outflows of resources attributable to the acquisition, construction or improvement of those assets or related debt also should be included.
• Restricted Net Position- reports net position when constraints placed on the residual amount of noncapital assets are either externally imposed by creditors (such as through debt covenants), grantors, contributors, or laws or regulations of other governments, or imposed by law through constitutional provisions or enabling legislation.
• Unrestricted Net Position - any portion of net position not already classified as either net investment in capital assets or net position- restricted is classified as net position- unrestricted.
35
HARRINGTON PARK BOARD OF EDUCATION NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2017
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
E. Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Net Position/Fund Balance (Continued)
10. Net Position/Fund Balance (Continued)
Governmental Fund Statements
Fund balance categories are designed to make the nature and extent of the constraints placed on the District's fund balance more transparent. These categories are comprised of a hierarchy based primarily on the extent to which the District is bound to observe constraints imposed upon the use of the resources reported in governmental funds.
Restricted Fund Balance
Excess Surplus- This restriction was created in accordance with NJSA 18A:7F-7 to represent the June 30, 2017 audited excess surplus that is required to be appropriated in the 2018/2019 original budget certified for taxes.
Excess Surplus -Designated (or Subsequent Year's Expenditures - This restriction was created in accordance with NJSA l8A:7F-7 to represent the June 30, 2016 audited excess surplus that was appropriated in the 2017/2018 original budget certified for taxes (See Note 2E).
Capital Reserve- This restriction was created by the District in accordance with NJAC 6A:23A-l4.l to fund future capital expenditures (See Note 2B).
Emergency Reserve- This restriction was created in accordance with NJAC 6A:23A-14.4(A)l to accumulate funds in accordance with State statute to finance unanticipated general fund expenditures required for a thorough and efficient education (See Note 2D).
Maintenance Reserve - This restriction was created by the Board in accordance with NJAC 6A:23A-14.2 to accumulate funds for the required maintenance of school facilities in accordance with the EFCA (NJSA 18A:7G-9) for a thorough and efficient education (See Note 2C).
Capital Projects - Represents fund balance restricted specifically for capital acquisitions and improvements in the Capital Projects Fund.
Assigned Fund Balance - Amounts a government intends to use for a specific purpose; intent can be expressed by the governing body or by an official or body to which the governing body delegates the authority.
Year-End Encumbrances - Represent outstanding purchase orders for goods or services approved by management for specific purposes from available resources of the current year for which the goods and materials have not yet been received or the services have not yet been rendered at June 30.
Designated for Subsequent Year's Expenditures - This designation was created to dedicate the portion of fund balance appropriated in the adopted 2017/2018 District budget certified for taxes.
Unassigned Fund Balance - Represents fund balance that has not been restricted, committed or assigned to specific purposes within the governmental funds.
36
HARRINGTON PARK BOARD OF EDUCATION NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2017
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
F. Revenues and Expenditures/Expenses
1. Program Revenues
Amounts reported as program revenues in the district-wide statement of activities include I) charges to customers or applicants for goods or services, provided, 2) operating grants and contributions, and 3) capital grants and contributions. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all property taxes, unrestricted state aid and miscellaneous revenues.
2. Property Taxes
Property taxes are levied pursuant to law and are collected by the municipality and are transferred to the District as requested. Property tax revenues are recognized in the year they are levied and become available. Property taxes collected in advance of the year-end for which they are levied and transferred to the District are reported as deferred inflows of resources. The tax bills are mailed annually in June by the municipal tax collector and are levied and due in four quarterly installments on August 1, November I, February I and May I of the fiscal year. When unpaid, taxes or any other municipal lien, or part thereof, on real property, remains in arrears on April I" in the year following the calendar year levy when the same became in arrears, the tax collector of the municipality shall, subject to the provisions of New Jersey Statute, enforce the lien by placing the property on a tax sale. The municipality may institute annual "in rem" tax foreclosure proceedings to enforce the tax collection or acquisition of title to the property.
3. Tuition Revenues and Expenditures
Tuition Revenues - Tuition charges were established by the Board of Education based on estimated costs. The charges are subject to adjustment when the fmal costs are determined and certified by the State Department of Education.
Tuition Expenditures- Tuition charges for the fiscal years 2015-2016 and 2016-2017 were based on rates established by the receiving district. These rates are subject to change when the actual costs have been certified by the State Department of Education.
4. Proprietary Funds, Operating and Nonoperating Revenues and Expenses
Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. The principal operating revenues of the special milk fund are charges to customers for sales and services. Operating expenses for enterprise funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this defmition are reported as nonoperating revenues and expenses. Federal and State subsidies for the food service operation are considered nonoperating revenues.
NOTE 2 STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
A. Budgetary Information
In accordance with the requirements of the New Jersey Department of Education ("the Department"), the District annually prepares its operating budget for the forthcoming year. The budget, except for the general fund and special revenue fund, which is more fully explained below and in the notes to the required supplementary information, is prepared in accordance with accounting principles generally accepted in the United States of America and serves as a formal plan for expenditures and the proposed means for fmancing them. Capital lease transactions are accounted for on the GAAP basis.
37
HARRINGTON PARK BOARD OF EDUCATION NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2017
NOTE 2 STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY (Continued)
A. Budgetary Information (Continued)
Prior to the 2012/2013 budget year, the annual budget was required to be voted upon at the annual school election held on the third Tuesday in April. On January 17, 2012, Chapter 202 of the Laws of P.L. 2011 was approved which established procedures for moving the date of a school district's annual school election from April to the general election in November. Under the new law, districts that have their school board members elected in November no longer have to submit their budgets that meet levy cap requirements for voter approval beginning with the 2012/2013 budget year. Only a school board decision to exceed the tax levy cap would require voter approval for the additional amount on the November ballot. On January 23, 2014, the Board adopted a resolution to move its annual election to the date of the general elections in accordance with the law; therefore voter approval of the annual budget is not required.
Budget adoptions and amendments are recorded in the District's board minutes. The budget is amended by the Board of Trustees as needed throughout the year. The budget for revenues, other resources, other uses, and fund balances is prepared by fund source and amount. The budget for expenditures is prepared by fund, program, function, object and amount. The legal level of budgetary control is established at the line item account within each fund. Line item accounts are defined as the lowest (most specific) level of detail as established pursuant to the minimum chart of accounts referenced in N.J.A.C. 6:20-2A.2(m)l. The Board approved several budget transfers during 2016/2017. Also, during 2016/2017 the Board increased the original budget by $362,413. The increase was funded by grant awards and the reappropriation of prior year general fund encumbrances.
Formal budgetary integration into the accounting system is employed as a management control device during the year. For governmental funds there are no substantial differences between the budgetary basis of accounting and accounting principles generally accepted in the United States of America, with the exception of the legally mandated revenue recognition of certain state aid payments for budgetary purposes only and the treatment of encumbrances in the special revenue fund as described in the Notes to Required Supplementary Information (RSI). Encumbrance accounting is also employed as an extension of formal budgetary integration in the governmental fund types. Unencumbered appropriations lapse at fiscal year end.
Encumbrance accounting is employed in the governmental funds. Under encumbrance accounting, purchase orders, contracts and other commitments for the expenditure of resources are recorded to reserve a portion of the applicable appropriation. Open encumbrances in governmental funds other than the special revenue fund are reported as committed and/or assigned fund balances at fiscal year end as they do not constitute expenditures or liabilities but rather commitments related to unperformed contracts for goods and services which are reappropriated and honored during the subsequent fiscal year.
B. Capital Reserve
A capital reserve account was established by the District. The accumulation of funds will be used for capital outlay expenditures in subsequent fiscal years. The capital reserve is maintained in the general fund and its activity is included in the general fund annual budget.
Funds placed in the capital reserve are restricted to capital projects in the district's approved Long Range Facilities Plan (LRFP). Upon submission of the LRFP to the Department, a district may increase the balance in the capital reserve by appropriating funds in the annual general fund budget certified for taxes or by transfer by board resolution at year end of any unanticipated revenue or unexpended line-item appropriation amounts or both. A district may also appropriate additional amounts when the express approval of the voters has been obtained either by a separate proposal at budget time or by a special question at one of the four special elections authorized pursuant to N.J.S.A. 19:60-2. Pursuant to N.J.A.C. 6:23A-14.l(g), the balance in the reserve cannot at any time exceed the local support costs of uncompleted capital projects in its approved LRFP.
38
HARRINGTON PARK BOARD OF EDUCATION NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30,2017
NOTE 2 STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY (Continued)
B. Capital Reserve (Continuued)
There was no activity in the capital reserve for the fiscal year ended June 30, 2017.
Balance July 1, 2016
Balance June 3 0, 2017
C. Maintenance Reserve
$50,100
$50.100
A maintenance reserve account was established by the District. The accumulation of funds will be used for required maintenance of school facilities expenditures in subsequent fiscal years. The maintenance reserve is maintained in the General Fund and its activity is included in the General Fund annual budget.
Funds placed in the maintenance reserve are restricted to required maintenance activities for a school facility as reported in the comprehensive maintenance plan. A District may appropriate funds into the maintenance reserve in the annual General Fund budget certified for taxes or by transfer by board resolution at year end of any unanticipated revenue or unexpended line item appropriation amounts or both. Pursuant to N.J.A.C. 6A:23A-14.2(g), the balance in the reserve cannot at any time exceed four percent of the replacement cost of the school district's school facilities for the current year.
The activity of the maintenance reserve for the fiscal year ended June 30, 2017 is as follows:
Balance, July 1, 2016 $ 125,125
Increased by Interest Earnings 125
Balance, June 30, 2017 $ 125,250
D. Emergency Reserve
An emergency reserve account was established by the District. The accumulation of funds will be used to fmance unanticipated General Fund current expenditures required for a thorough and efficient education in subsequent fiscal years.
Funds placed in the emergency reserve are restricted to finance reasonably unforeseeable costs and shall not include additional costs due to poor planning. A District may appropriate funds into the emergency reserve in the annual General Fund budget certified for taxes or by transfer by board resolution at year end of any unanticipated revenue or unexpended line item appropriation amounts or both. Withdrawals from the reserve require the approval of the Commissioner unless the withdrawal is necessary to meet an increase in total health care costs in excess of four percent or the withdrawal is included in the original budget certified for taxes to fmance school security improvements to school facilities pursuant to 18A:7G-6(c)l. Pursuant to NJAC 6A:23A-14.4(A), the balance in the reserve cannot at any time exceed the greater of $250,000 or one percent of the school district's General Fund budget as certified for taxes up to a maximum of$1,000,000.
The activity of the emergency reserve for the fiscal year ended June 30, 2017 is as follows:
Balance, July 1, 2016 $ 176,819
Increased by Interest Earnings 175
Balance, June 30, 2017 $ 176,994
39
HARRINGTON PARK BOARD OF EDUCATION NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2017
NOTE 2 STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY (Continued)
E. Calculation of Excess Surplus
In accordance with N.J.S.A. 18A:7F-7, as amended, the restricted fund balance for Excess Surplus is a required calculation pursuant to the New Jersey Comprehensive Educational Improvement and Financing Act of 1996 (CEIFA). New Jersey school districts are required to restrict General Fund fund balance in excess of 2% of budget expenditures at the fiscal year end of June 30 if they did not appropriate a required minimum $407,171. Of this amount, $55,106 was designated and appropriated in the 2017/2018 original budget certified for taxes and the remaining amount of $352,065 will be appropriated in the 2018/2019 original budget certified for taxes.
NOTE 3 DETAILED NOTES ON ALL FUNDS
A. Cash Deposits and Investments
Cash Deposits
The Board's deposits are insured through either the Federal Deposit Insurance Corporation (FDIC), National Credit Union Share Insmance Fund (NCUSIF), Secmities Investor Protection Corporation (SIPC) or New Jersey's Governmental Unit Deposit Protection Act (GUDPA). The Board is required to deposit their funds in a depository which is protecting such funds pmsuant to GUDP A. The New Jersey Governmental Unit Deposit Protection Act requires all banks doing business in the State of New Jersey to pledge collateral equal to at least 5% of the average amount of its public deposits and 100% of the average amount of its public funds in excess of the lesser of 75% of its capital funds or $200 million for all deposits not covered by the FDIC.
Bank balances are insured up to $250,000 in the aggregate by the FDIC for each bank. NCUSIF insures credit union accounts up to $250,000 in the aggregate for each financial institution. SIPC replaces cash claims up to a maximum of $250,000 for each failed brokerage finn. At June 30, 2017, the book value of the Board's deposits were $1,349,264 and bank and brokerage firm balances of the Board's deposits amounted to $1,482,084. The Board's deposits which arc displayed on the various fund balance sheets as "cash and cash equivalents" are categorized as:
Depository Account
Insured $ 1,482,084
Custodial Credit Risk- Deposits- Custodial credit risk is the risk that in the event of a bank failure, the government's deposits may not be returned to it. The Board does not have a policy for custodial credit risk. As of June 30, 2017 none of the Board's bank balances were exposed to custodial credit risk.
40
HARRINGTON PARK BOARD OF EDUCATION NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30,2017
NOTE 3 DETAILED NOTES ON ALL FUNDS (Continued)
A. Cash Deposits aud Investments (Continued)
Investments
The Board is permitted to invest public funds in accordance with the types of securities authorized by N.J.S.A. 18A:20-37. Examples of the allowable investments are bonds or other obligations of the United States or obligations guaranteed by the United States of America, Government Money Market Mutual Funds, bonds or other obligations of the school district or bonds or other obligations of the local unit or units within which the school district is located, Local Government investment pools, and agreements or the repurchase of fully collateralized securities, if transacted in accordance with the above statute.
As of June 30, 2017, the Board had no outstanding investments.
Interest Rate Risk - The Board does not have a formal investment policy that limits investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates.
Credit Risk - State law limits investments as noted above (N.J.S.A. 18A:20-37). The District does not have an investment policy that would further limit its investment choices.
Concentration of Credit Risk- The Board places no limit in the amount the District may invest in any one issuer.
B. Receivables
Receivables as of June 30, 2017 for the district's individual major funds in the aggregate, including the applicable allowances for uncollectible accounts, are as follows:
Receivables: Intergovernmental
Federal State Other
Gross Receivables Less: Allowance for
Uncollectibles
Net Total Receivables
$
$
General Fund
18,538 12,922
31,460
$
31,460 $
Food Service Fund
412 $ 412 18,538 12,922
412 31,872
412 $ 31,872 ~~~c=
41
HARRINGTON PARK BOARD OF EDUCATION NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30,2017
NOTE 3 DETAILED NOTES ON ALL FUNDS (Continued)
C. Unearned Revenue
Governmental funds report unearned revenue in connection with resources that have been received, but not yet earned. At the end of the current fiscal year, the various components of unearned revenue reported in the governmental funds were as follows:
Special Revenue Fund Unencumbered Grant Draw Downs $ 1,277
Total Unearned Revenue for Governmental Funds $ 1,277
D. Capital Assets
Capital asset activity for the fiscal year ended June 30, 2017 was as follows:
Balance, Balance,
July I, 2016 Increases Decreases June 30, 2017
Governmental activities:
Capital assets, not being depreciated: Land $ 504,400 $ 504,400
Total capital assets, not being depreciated 504,400 504,400
Capital assets, being depreciated: Buildings and Building Improvements 14,941,355 $ 972,663 15,914,018 Machinery and Equipment 656,837 49,201 $ (5,772) 700,266
Total capital assets being depreciated 15,598,192 1,021,864 (5,772) 16,614,284
Less accumulated depreciation for: Buildings and Building Improvements (7,986,382) (273,716) (8,260,098) Machinery and equipment (380,496) (54,899) 9,388 (426,007)
Total accumulated depreciation (8,366,878) (328,615) 9,388 (8,686, I 05)
Total capital assets, being depreciated, net 7,231,314 693,249 3,616 7,928,179
Government activities capital assets, net $ 7,735,714 $ 693,249 $ 3,616 $ 8,432,579
42
I
HARRINGTON PARK BOARD OF EDUCATION NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30,2017
NOTE 3 DETAILED NOTES ON ALL FUNDS (Continued)
D. Capital Assets (Continued)
Balance, July I, 2016
Business-type activities: Capital assets, being depreciated: Machinery and equipment $ 7,828
Total capital assets being depreciated 7,828
Less accumulated depreciation for: Machinery and equipment (5,920)
Total accumulated depreciation (5,920)
Total capital assets, being depreciated, net 1,908
Business-type activities capital assets, net $ 1,908
Increases
$ 7,662
7,662
(441)
(441)
7,221
$ 7,221
Depreciation expense was charged to functions/programs of the District as follows:
Governmental activities:
Instruction Regular School-Sponsored/Other Instructional
Total Instruction
Support Services Student and Instruction Related Services
General Administration Services School Administration Services Operation and Maintenance of Facilities Pupil Transportation
Total Support Services
Total Depreciation Expense- Governmental Activities
Business-Type Activities: Food Service Fund
Total Depreciation Expense-Business-Type Activities
43
Decreases
$
$
$
$ $
Balance,
June 30,2017
$
$
15,490
15,490
(6,361)
(6,361)
9,129
9,129
1,773 3,203 4,976
13,342 20,137
251 285,646
4,263 323,639
328,615
441 441
HARRINGTON PARK BOARD OF EDUCATION NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2017
NOTE 3 DETAILED NOTES ON ALL FUNDS (Continued)
E. Interfund Receivables, Payables, and Transfers
The composition ofinterfund balances as of June 30, 2017, is as follows:
Due to/from Other Funds
Receivable Fund
General Fund Unemployment Compensation Trust Fund Payroll Agency Fund
Total
Payable Fund
Payroll Agency Fund General Fund Unemployment Compensation Trust Fund
Amount
$ 18,751
9,184 5,712
$ 33,647
The above balances are the result of revenues earned or other financing sources received in one fund which are due to another fund and/or expenditures paid by one fund on behalf of another fund.
The District expects all interfund balances to be liquidated within one year.
F. Leases
Operating Leases
The District leases copier equipment under noncancelable operating leases. Lease payments for the fiscal year ended June 30, 2017 were $15,564. The future minimum lease payments for these operating leases are as follows:
Fiscal
Year Ending June 30 Amount
2018 $ 15,564 2019 15,564 2020 15,564
Total $ 46,692
44
HARRINGTONPARKBOARDOFEDUCATION NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2017
NOTE 3 DETAILED NOTES ON ALL FUNDS (Continued)
F. Leases (Continued)
Capital Leases
The District is leasing one school bus, modular classrooms, and a tractor totaling $1,046,060 under capital leases. The leases are for terms of 3 to 5 years.
The capital assets acquired through capital leases are as follows:
Machinery and Equipment
Total
Governmental Activities
$ 1,046,060
$ 1,046,060
The future minimum lease obligations and the net present value of these minimum lease payments as of June 30, 2017 were as follows:
Fiscal Year Ending June 30
2018 2019 2020 2021
Total minimum lease payments Less: amount representing interest Present value of minimum lease payments
45
Governmental Activities
$
$
222,066 212,034 212,035 203,306
849,441 (30,865) 818,576
HARRINGTON PARK BOARD OF EDUCATION NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2017
NOTE 3 DETAILED NOTES ON ALL FUNDS (Continued)
G. Long-Term Debt
General Obligation Bonds
The Board issued general obligation bonds to provide funds for the acquisition and construction of major capital facilities and other capital assets. The full faith and credit of the Board are inevocably pledged for the payment of the principal of the bonds and the interest thereon.
Bonds payable at June 30,2017 are comprised of the following issues:
$3,465,000, 2001 Bonds, due in an annual installment of $320,000 through August 1, 2017, interest at 4.75%
$1,552,000, 2007 Bonds, due in an annual installment of $50,000 through July 15, 2017, interest at 4.25%
$1,333,000,2017 Refunding Bonds, due in annual installments of$25,000 to $308,000
$ 320,000
50,000
through July 15, 2022, interest at 1.65% 1,333,000
$ 1,703,000
The Board's schedule of principal and interest for long-tetm debt issued and outstanding is as follows:
Governmental Activities:
Fiscal Year Ending Serial Bonds
June 30. Principal Interest Total
2018 $ 395,000 $ 26,297 $ 421,297 2019 214,000 19,817 233,817 2020 234,000 16,121 250,121 2021 267,000 11,987 278,987 2022 285,000 7,433 292,433
2023-2024 308,000 2,540 310,540
$ 1,703,000 $ 84,195 $ 1,787,195
46
HARRINGTON PARK BOARD OF EDUCATION NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2017
NOTE 3 DETAILED NOTES ON ALL FUNDS (Continued)
G. Long-Term Debt (Continued)
Statutorv Borrowing Power
The Board's remaining borrowing power under N.J.S. 18A:24-19, as amended, at June 30, 2017 was as follows:
3% of Equalized Valuation Basis (Municipal) Less: Net Debt
Remaining Borrowing Power
Advance Refunding of Debt
$ 29,290,877 1,703,000
$ 27,587,877
On March 23, 2017, the District issued $1,333,000 in Refunding School Bonds having an interest rate of 1,65%. These bonds were issued in order to advance refund certain principal maturities and certain interest payments of the 2007 School Bonds oftbe District. The total bond principal defeased was $1,277,000 and the total interest payments defeased to tbe call date was $27,813. The net proceeds of $1,302,088 (after payment of underwriting fees, insurance and other issuance costs) were used to purchase U.S. Government securities. Those securities were deposited in an irrevocable trust witb an escrow agent to provide for all future debt service payments. As a result, the advance refunding met tbe requirements of an insubstance debt defeasance and the refunded bond liability has been removed from the governmental activities colunm of tbe statement of net position. The reacquisition price exceeded tbe net carrying amount oftbe old debt by $25,088. This amount has been reported as a Deferred Outflow of Resources on tbe fmancial statements and amortized over tbe remaining life of tbe new debt issued. This advance refunding was undertaken to reduce total debt service payments over the next 6 years by $77,162 and resulted in an economic gain of$74,152.
H. Other Long-Term Liabilities
Changes in Long-Term Liabilities
Long-term liability activity for the fiscal year ended June 30, 2017, was as follows:
Due Balance, Balance, Within
July 1, 2016 Additions Reductions June 30, 2017 One Year
Governmental activities: Serial Bonds Payable $ 2,002,000 $ 1,333,000 $ 1,632,000 $ 1,703,000 $ 395,000 Capital Leases Payable 19,161 998,848 199,433 818,576 209,631 Compensated Absences Payable 154,336 25,381 179,717 10,579 Net Pension Liability 3,998,922 2,003,729 174,810 5,827,841
Governmental activity Long-term liabilities $ 6,174,419 $ 4,360,958 $ 2,006,243 $ 8,529,134 $ 615,210
For the governmental activities, the liabilities for capital leases, compensated absences and net pension liability are generally liquidated by the general fund.
47
HARRINGTON PARK BOARD OF EDUCATION NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2017
NOTE 4 OTHER INFORMATION
A. Risk Management
The District is exposed to various risks of loss related to property, general liability, automobile coverage, theft of, damage to and destruction of assets; errors and omissions; injuries to employees; student accident; termination of employees and natnral disasters. The Board has obtained commercial insurance coverage to guard against these events to minimize the exposure to the District should they occur. A complete schedule of insurance coverage can be found in the statistical section of this Comprehensive Annual Financial Report.
The District is a member of the Northeast Bergen County School Board Insurance Group (NESBIG). The Group is a risk sharing public entity pool, established for the purpose of insuring against worker's compensation claims.
The relationship between the Board and the insurance fund is governed by a contract and by-laws that have been adopted by resolution of each unit's governing body. The Board is contractually obligated to make all annual and supplementary contributions to the fund, to report claims on a timely basis, cooperate with the management of the fund, its claims administrator and attorneys in claims investigation and settlement, and to follow risk management procedures as outlined by the fund. Members have a contractnal obligation to fund any deficit of the fund attributable to a membership year during which they were a member.
NESBIG provides its members with risk management services, including the defense of and settlement of claims and to establish reasonable and necessary loss reduction and prevention procedures to be followed by the members. Complete financial statements of the insurance fund are on file with the School's Business Administrator.
There has been no significant reduction in insurance coverage from the previous year nor have there been any settlements in excess of insurance coverage's in any of the prior three years.
The District has elected to fund its New Jersey Unemployment Compensation Insurance under the "Benefit Reimbursement Method". Under this plan the District is required to reimburse the New Jersey Unemployment Trust Fund for benefits paid to its former employees and charged to its account with the State. The District is billed quarterly for amounts due to the State. The following is a summary of District contributions, employee contributions, reimbursements to the State for benefits paid and the ending balance of the District's fiduciary trust fund for the current and previous two years:
District Employee Amount Ending Fiscal Year Contributions Contributions Reimbursed Balance
2017 $ 261 $ II ,259 $ 4,773 $ 77,291
2016 3,401 10,693 3,401 70,544
2015 4,904 I 0, 719 4,904 59,851
48
HARRINGTON PARK BOARD OF EDUCATION NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2017
NOTE 4 OTHER INFORMATION (Continued)
B. Contingent Liabilities
The District is a party defendant in some lawsuits, none of a kind unusual for a school district of its size and scope of operation. In the opinion of the Board's Attorney the potential claims against the District not covered by insurance policies would not materially affect the fmancial condition of the District.
Federal and State Awards - The Board participates in a number of federal and state programs that are fully or partially funded by grants received from other governmental units. Expenditures financed by grants are subject to audit by the appropriate grantor government. If expenditures are disallowed due to noncompliance with grant program regulations, the Board may be required to reimburse the grantor government. As of June 30, 2017, significant amounts of grant expenditures have not been audited by the various grantor agencies but the Board believes that disallowed expenditures, if any, based on subsequent audits will not have a material effect on any of the individual governmental funds or the overall fmancial position of the District.
C. Federal Arbitrage Regulations
The District is subject to Section 148 of the Internal Revenue Code as it pertains to the arbitrage rebate on all tax-exempt obligations, both long and short-term debt. Under the 1986 Tax Reform Act, the Internal Revenue Service (IRS) required that all excess earnings from investment proceeds be rebated to the IRS. Arbitrage, for purposes of these regulations, is defined as the difference between the yield on the investment and the yield on the obligations issued. If there are excess earnings, this amount may be required to be rebated to the IRS. At June 30, 2017, the District has not estimated its arbitrage earnings due to the IRS, if any.
D. Employee Retirement Systems and Pension Plans
The State of New Jersey sponsors and administers the following contributory defmed benefit public employee retirement systems (retirement systems) covering substantially all eligible Board employees:
Public Employees' Retirement System (PERS)- Established in January 1955, under the provisions ofN.J.S.A. 43: 15A to provide coverage, including post-retirement health care, to substantially all full time employees of the State or any county, municipality, school district, or public agency provided the employee is not a member of another State-administered retirement system. Membership is mandatory for such employees and vesting occurs after 10 years of service for pension benefits and 25 years for post-retirement health care coverage. PERS is a cost sharing multi-employer defmed benefit pension plan.
Teachers' Pension and Annuity Fund (TP AF)- Established in January 1955, under the provisions ofN.J.S.A. 18A:66 to provide coverage including post-retirement health care to substantially all full time certified teachers or professional staff of the public school systems in the State. Membership is mandatory for such employees and vesting occurs after 10 years of service for pension benefits and 25 years for post-retirement health care coverage. TPAF is a cost sharing plan with special funding situations.
The State of New Jersey sponsors and administers the following defined contribution public employee retirement program covering certain state and local government employees which include those Board employees who are eligible for pension coverage.
Defined Contribution Retirement Program (DCRP) - established under the provisions of Chapter 92, P .L. 2007 and Chapter 103, P.L. 2008 to provide coverage to elected, certain appointed officials, and certain Board employees not eligible for enrollment in PERS or TPAF. Effective July 1, 2007 membership is mandatory for such individuals with vesting occurring after one (1) year of membership. DCRP is a defined contribution pension plan.
49
HARRINGTON PARK BOARD OF EDUCATION NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2017
NOTE 4 OTHER INFORMATION (Continued)
D. Employee Retirement Systems and Pension Plans (Continued)
Other Pension Funds
The State established and administers a Supplemental Annuity Collective Trust Fund (SACT) which is available to active members of the State-administered retirement systems to purchase annuities to supplement the guaranteed benefits provided by their retirement system. The state or local government employers do not appropriate funds to SACT.
The cost of living increase for PERS and TP AF, are funded directly by each of the respective systems but are currently suspended as a result of reform legislation.
According to state law, all obligations of each retirement system will be assumed by the State of New Jersey should any retirement system be terminated.
The State of New Jersey, Department of the Treasury, Division of Pensions and Benefits, issues publicly available financial reports that include the fmancial statements and required supplementary information of each of the above systems. The fmancial reports may be accessed via the New Jersey, Division of Pensions and Benefits, website at www .state.nj .us/treasw:y/pensions.
Basis of Accounting
The fmancial statements of the retirement systems are prepared on the accrual basis of accounting. Employer contributions are recognized when payable to the retirement systems. Benefits or refunds are recognized when due and payable in accordance with the terms of the retirement systems.
Investment Valuation
Investments are reported at fair value. Securities traded on a national or international exchange are valued at the last reported sales price at current exchange rates. Mortgages are valued on the basis of future principal and interest payments, and are discounted at prevailing interest rates for similar instruments. The fair value of real estate investments is based on independent appraisals. Investments that do not have an established market are reported at estimated fair values.
The State of New Jersey, Department of the Treasury, Division of Investment, issues publicly available fmancial reports that include the fmancial statements of the State of New Jersey Cash Management Fund. The financial reports may be obtained in writing to the State of New Jersey, Department of the Treasury, Division of Investment, P.O. Box 290, Trenton, New Jersey 08625-0290 or at www.state.nj/treasury/doinvest.
Funding Status and Funding Progress
As of July I, 2015, the most recent actuarial valuation date, the aggregate funded ratio for the State administered TPAF and local PERS retirement systems, is 28 percent with an unfunded actuarial accrued liability of $108.6 billion. The aggregate funded ratio and unfunded accrued liability for the State-funded TPAF system is 22.33 percent and $79.0 billion, and the aggregate funded ratio and unfunded accrued liability for local PERSis 40.14 percent and $29.6 billion, respectively.
The funded status and funding progress of the retirement systems is based on actuarial valuations which involve estimates of the value of reported amounts and assumptions about the probability of events far into the future. These amounts are subject to continual revision as actual results are compared to past expectations and new estimates are made about the probability of future events.
50
HARRINGTON PARK BOARD OF EDUCATION NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30,2017
NOTE 4 OTHER INFORMATION (Continued)
D. Employee Retirement Systems and Pension Plans (Continued)
Funding Status and Funding Progress (Continued)
Actuarial calculations reflect a long-term perspective and are based on the benefits provided under the terms of the retirement systems in effect at the time of each valuation and also consider the pattern of the sharing of costs between the employer and members at that point in time. The projection of benefits for financing reporting purposes does not explicitly incorporate the potential effects of legal or contractual funding limitations on the pattern of cost sharing between the employer and members in the future.
Actuarial Methods and Assumptions
In the July 1, 2015 actuarial valuation, the projected unit credit was used as the actuarial cost method, and the five year average of market value was used as the asset valuation method for the retirement systems. The actuarial assumptions included (a) an investment rate of return for the retirement systems of 7.65 percent and (b) projected salary increases applied through the year 2026 of 1.65-5.15 percent based on age for the PERS and varying percentages based on experience for TPAF.
Employer and Employee Pension Contributions
The contribution policy is set by laws of the State of New Jersey and contributions are required by active members and participating employers. Plan member and employer contributions may be amended by State of New Jersey legislation with the amount of contributions by the State of New Jersey contingent upon the Annual Appropriations Act. As defmed, the retirement systems require employee contributions based on 7.06% for PERS, 7.06% for TPAF and 5.50% for DCRP ofthe employee's armual compensation.
Annual Pension Costs (APC)
Per the requirements of GASB Statement No. 27 Accounting for Pensions by State and Local Government Employees, for the fiscal year ended June 30, 2017 for TPAF, which is a cost sharing plan with special funding situations, the armual pension cost differs from the armual required contribution. For PERS, which is a cost sharing multi-employer defined benefit pension plan, the armual pension cost equals contributions made. TP AF employer contributions are made annually by the State of New Jersey to the pension system on behalf of the Board. PERS employer contributions are made armually by the Board to the pension system in accordance with Chapter 114, P.L. 1997. In the DCRP, which is a defined contribution plan, member contributions are matched by a 3% employer contribution.
During the fiscal years ended June 30, 2017, 2016 and 2015 the Board was required to contribute for PERS and DCRP and the State of New Jersey was required to contribute for TPAF, respectively for normal cost pension and accrued liability contributions (including non-contributory group life insurance (NCGI)) the following amounts:
Year Ended On-behalf June 30, PERS TPAF DCRP
2017 $ 174,810 $ 514,976 $ 2,380 2016 153,154 397,205 3,155 2015 146,783 253,146 2,029
In addition for fiscal year 2016/2017 the District contributed $811 for PERS and the State contributed $955 for TPAF for Long Term Disability Insurance Premimn (LTD!).
51
HARRINGTON PARK BOARD OF EDUCATION NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30,2017
NOTE 4 OTHER INFORMATION (Continued)
D. Employee Retirement Systems and Pension Plans (Continued)
Annual Pension Costs (APC) (Continued)
The PERS contributions are recognized in the governmental fund frnancial statements (modified accrual basis) as an expenditure. The on-behalf TPAF contributions are recognized in the governmental fund financial statements (modified accrual basis) as both a revenue and expenditure in accordance with GASB No. 24. The DCRP contributions are recognized in the governmental fund fmancial statements (modified accrual basis) as an expenditure, as well as, the district-wide fmancial statements (accrual basis) as an expense.
Also, in accordance with N.J.S.A. 18A:66-66 the State of New Jersey reimbursed the Board $361,235 during the fiscal year ended June 30, 2017 for the employer's share of social security contributions for TPAF members as calculated on their base salaries. This amount has been recognized in the district-wide financial statements (accrual basis) and the governmental fund fmancial statements (modified accrual basis) as a revenue and expense/expenditure in accordance with GASB No. 24.
Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions
Public Employees Retirement System (PERS)
At June 30, 2017, the District reported in the statement of net position (accrual basis) a liability of $5,827,841 for its proportionate share of the PERS net pension liability. The net pension liability was measured as of June 30, 2016 and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. The District's proportionate share of the net pension liability was based on a projection of the District's long-term share of contributions to the pension plan relative to the projected contributions of all participating governmental entities, actuarially determined. At June 30, 2016, the District's proportionate share was .01968 percent, which was an increase of .00187 percent from its proportionate share measured as ofJune 30, 2015 of .01781 percent.
For the fiscal year ended June 30, 2017, the District recognized in the district-wide statement of activities (accrual basis) pension expense of $675,768 for PERS. At June 30, 2017, the District reported deferred outflows of resources and deferred inflows of resources related toPERS pension from the following sources:
Difference Between Expected and Actual Experience
Changes of Assumptions Net Difference Between Projected and Actual
Earnings on Pension Plan Investments Changes in Proportion and Differences Between
District Contributions and Proportionate Share of Contributions
Total
$
$
Deferred Deferred Outflows Inflows
of Resources of Resources
108,380 1,207,217
222,221
485,948 $
2,023,766 $
52
HARRINGTON PARK BOARD OF EDUCATION NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2017
NOTE 4 OTHER INFORMATION (Continued)
D. Employee Retirement Systems and Pension Plans (Continued)
Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions (Continued)
Public Employees Retirement System (PERS) (Continued)
At June 30, 2017, the amounts reported as deferred outflows of resources and deferred inflows of resources related toPERS pension will be recognized in pension expense as follows:
Fiscal Year Ending June 30,
2018 2019 2020 2021 2022
Thereafter
Actuarial Assumptions
$ 465,347 465,347 514,960 427,604 150,508
$ 2,023,766
The District's total pension liability for the June 30, 2016 measurement date was determined by an actuarial valuation as of July 1, 2015, which was rolled forward to June 30, 2016. This actuarial valuation used the following actuarial assumptions, applied to all periods in the measurement:
Inflation Rate
Salary Increases:
Through 2026
Thereafter
Investment Rate of Return
Mortality Rate Table
3.08%
1.65-4.15% Based on Age
2.65-5.15% Based on Age
7.65%
RP-2000
Assumptions for mortality improvements are based on Society of Actuaries Scale AA.
The actuarial assumptions used in the July 1, 2015 valuation were based on the results of an actuarial experience study for the period July 1, 2011 to June 30, 2014.
53
HARRINGTON PARK BOARD OF EDUCATION NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEARENDEDJUNE30,2017
NOTE 4 OTHER INFORMATION (Continued)
D. Employee Retirement Systems and Pension Plans (Continued)
Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions (Continued)
Public Employees Retirement System (PERS) (Continued)
Long-Term Expected Rate of Return
The long-term expected rate of return on pension plan investments was determined using a building-block method in which best-estimate ranges of expected future real rate of return (expected returns, net of pension plans investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. Best estimates of arithmetic real rates of return for each major asset class included in the pension plans' target asset allocation as of June 30, 2016 are summarized in the following table:
Long-Term Target Expected Real
Asset Class Allocation Rate of Return
Cash 5.00% 0.87% U.S. Treasuries 1.50% 1.74% Investment Grade Credit 8.00% 1.79% Mortgages 2.00% 1.67% High Yield Bonds 2.00% 4.56% Inflation-Indexed Bonds 1.50% 3.44% Broad US Equities 26.00% 8.53% Developed Foreign Equities 13.25% 6.83%
Emerging Market Equities 6.50% 9.95% Private Equity 9.00% 12.40%
Hedge Funds/Absolute Return 12.50% 4.68% Real Estate (Property) 2.00% 6.91% Commodities 0.50% 5.45% Global Debt ex US 5.00% -0.25% REIT 5.25% 5.63%
Discount Rate
The discount rate used to measure the total pension liabilities of the PERS plan was as follows:
Year Measurement Date Discount Rate
2017 June 30, 2016 3.98%
54
HARRINGTON PARK BOARD OF EDUCATION NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30,2017
NOTE 4 OTHER INFORMATION (Continued)
D. Employee Retirement Systems and Pension Plans (Continued)
Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions (Continued)
Public Employees Retirement System (PERS) (Continued)
Discount Rate (Continued)
The following table represents the crossover period, if applicable, for the PERS defmed benefit plan:
Period of Projected Benefit Payments for which the Following
Rates were Applied: Long-Term Expected Rate ofRetum
Municipal Bond Rate *
Through June 30, 2034
From July 1, 2034 and Thereafter
*The municipal bond return rate used is 2.85% as of the measurement date of June 30, 2016. The source is the Bond Buyer Go 20-Bond Municipal Bond Index, which includes tax-exempt general obligation municipal bonds with an average rating of AAI Aa or higher.
Sensitivity of Net Pension Liability
The following presents the District's proportionate share of the PERS net pension liability calculated using the discount rate of3.98%, as well as what the District's proportionate share of the PERS net pension liability would be if it were calculated using a discount rate that is !-percentage-point lower (2.98 percent) or !-percentage-point higher (4.98 percent) than the current rate:
District's Proportionate Share of the PERS Net Pension Liability $
1% Decrease (2.98%)
7,141,339
Current Discount Rate
(3.98%)
$ 5,827,841 $
1% Increase (4.98%)
4,743,435
The sensitivity analysis was based on the proportionate share of the District's net pension liability at June 30, 2016. A sensitivity analysis specific to the District's net pension liability was not provided by the pension system.
Pension Plan Fiduciary Net Position
Detailed information about the PERS pension plan's fiduciary net position is available in the separately issued fmancial report from the State of New Jersey, Department of the Treasury, Division of Pension and Benefits. The financial report may be accessed via the New Jersey, Division of Pensions and Benefits, website at www.state.nj.us/treasury/pensions.
55
HARRINGTON PARK BOARD OF EDUCATION NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2017
NOTE 4 OTHER INFORMATION (Continued)
D. Employee Retirement Systems and Pension Plans (Continued)
Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions (Continued)
Teachers Pension and Annuity Fund (TP AF)
In accordance with GASB Statement No. 68, Accounting and Financial Reporting for Pensions, the District is not required to recognize a net pension liability for TPAF. The State of New Jersey is the only entity that has a legal obligation to make employer contributions to TP AF on behalf of the District. Accordingly, the District's proportionate share percentage determined under Statement No. 68 is zero percent and the State's proportionate share is 100% of the net pension liability attributable to the District for TP AF. Therefore, in addition, the District does not recognize any portion of the TP AF collective deferred outflows of resources and deferred inflows of resources.
For the fiscal year ended June 30, 2017, the District recognized in the district-wide statement of activities (accrual basis) pension expense of$2,932,349 for TPAF. This amount has been included in the district-wide statement of activities (accrual basis) as a revenue and expense in accordance with GASB No. 24.
At June 30,2017 the State's proportionate share of the net pension liability attributable to the District is $39,027,179. The nonemployer allocation percentages are based on the ratio of the State's contributions made as an employer and nonemployer towards the actuarially determined contribution amount adjusted by locations who participated in the State early retirement incentives to total contributions to TPAF during the year ended June 30, 2016. At June 30, 2016, the state's share of the net pension liability attributable to the District was .04961 percent, which was an increase of .00279 percent from its proportionate share measured as of June 30,2015 of .04682 percent.
Actuarial Assumptions
The total pension liability for the June 30, 2016 measurement date was determined by an actuarial valuation as of July 1, 2015, which was rolled forward to June 30, 2016. This actuarial valuation used the following actuarial assumptions, applied to all periods in the measurement.
Inflation Rate
Salary Increases: 2012-2021
Thereafter
Investment Rate of Return
2.50%
Varies based on experience
Varies based on experience
7.65%
Assumptions for mortality rates were based on the experience of TP AF members reflecting mortality improvement on a generational bases based on a 60-year average ofSocia1 Security data from 1953 to 2013.
The actuarial assumptions used in the July 1, 2015 valuation were based on the results of an actuarial experience study for the period July 1, 2012 to June 30, 2015.
56
HARRINGTON PARK BOARD OF EDUCATION NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30,2017
NOTE 4 OTHER INFORMATION (Continued)
D. Employee Retirement Systems and Pension Plans (Continued)
Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions (Continued)
Teachers Pension and Annuity Fund (TP AF) (Continued)
Long-Term Expected Rate of Return
The long-term expected rate of return on pension plan investments was determined using a building-block method in which best-estimate ranges of expected future real rate of return (expected returns, net of pension plans investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. Best estimates of arithmetic real rates of return for each major asset class included in the pension plans' target asset allocation as of June 30, 2016 are summarized in the following table:
Long-Term
Target Expected Real
Asset Class Allocation Rate of Return
US Cash 5.00% 0.39% US Government Bonds 1.50% 1.28%
US Credit Bonds 13.00% 2.76%
US Mortgages 2.00% 2.38%
US Inflation-Indexed Bonds 1.50% 1.41%
US High Yield Bonds 2.00% 4.70%
US Equity Market 26.00% 5.14% Foreign-Developed Equity 13.25% 5.91%
Emerging Markets Equity 6.50% 8.16%
Private Real Estate Property 5.25% 3.64% Timber 1.00% 3.86% farmland 1.00% 4.39% Private Equity 9.00% 8.97% Commodities 0.50% 2.87%
Hedge Funds -Multi Strategy 5.00% 3.70%
Hedge Funds - Equity Hedge 3.75% 4.72% Hedge Funds - Distressed 3.75% 3.49%
57
HARRINGTON PARK BOARD OF EDUCATION NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2017
NOTE 4 OTHER INFORMATION (Continued)
D. Employee Retirement Systems and Pension Plans (Continued)
Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions (Continued)
Teachers Pension and Annuity Fund (TP AF) (Continued)
Discount Rate
The discount rate used to measure the total pension liabilities of the TP AF plan was as follows:
Year Measurement Date Discount Rate
2017 June 30,2016 3.22%
The following table represents the crossover period, if applicable, for the TP AF defined benefit plan:
Period of Projected Benefit
Payments for which the Following
Rates were Applied:
Long-Term Expected Rate of Return
Municipal Bond Rate *
Through June 30, 2029
From July 1, 2029
and Thereafter
*The municipal bond return rate used is 2.85% as of the measurement date of June 30, 2016. The source is the Bond Buyer Go 20-Bond Municipal Bond Index, which includes tax-exempt general obligation municipal bonds with an average rating of AAI Aa or higher.
Sensitivity of Net Pension Liability
The following presents the State's proportionate share of the TPAF net pension liability attributable to the District calculated using the discount rate of3.22% as well as what the State's proportionate share of the TPAF net pension liability attributable to the District that would be if it were calculated using a discount rate that is !-percentage-point lower (2.22 percent) or !percentage-point higher (4.22 percent) than the current rate:
1% Current 1% Decrease Discount Rate Increase (2.22%) (3.22%) (4.22%}
State's Proportionate Share of the TP AF Net Pension Liability Attributable to the District $ 46,607,173 $ 39,027,179 $ 32,837,135
The sensitivity analysis was based on the State's proportionate share of the net pension liability attributable to the District at June 30, 2016. A sensitivity analysis specific to the State's proportionate share of the net pension liability attributable to the District at June 30, 2016 was not provided by the pension system.
58
HARRINGTON PARK BOARD OF EDUCATION NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2017
NOTE 4 OTHER INFORMATION (Continued)
D. Employee Retirement Systems and Pension Plans (Continued)
Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions (Continued)
Teachers Pension and Annuity Fund (TPAF) (Continued)
Pension Plan Fiduciary Net Position
Detailed information about the TPAF pension plan's fiduciary net position is available in the separately issued fmancial report from the State of New Jersey, Department of the Treasury, Division of Pension and Benefits. The financial report may be accessed via the New Jersey, Division of Pensions and Benefits, website at www.state.nj.us/treasury/pensions.
E. Post-Retirement Medical Benefits
The State of New Jersey sponsors and administers the post-retirement health benefit program plans for school districts. The Plans are classified as either single employer plans or cost sharing multiple employer defmed benefit plans depending on the plan the eligible employee is covered under.
As a result of implementing Governmental Accounting Standards Board (GASB) Statement No. 43, Financial Reporting for Post-employment Benefit Plans Other than Pension Plans (OPEB), effective for Fiscal Year 2007, the State Health Benefits Program (SHBP), and the Prescription Drug Program (PDP), and Post-Retirement Medical (PRM) of the PERS and TPAF are combined and reported as Pension and Other employee Benefit Trust Funds in the State's Comprehensive Annual Financial Report (CAFR). Specifically, SHBP-State, and the PRM of the PERS are combined and reported as a Health Benefits Program Fund - State classified as a single employer plan. The SHBP-Local, PDP-Local, and the PRM of the TPAF-Local are combined and reported as Health Benefits Program Fund -Local Government classified as a cost-sharing multiple-employer plan in the State's CAFR. The post-retirement benefit programs had a total of 584 state and local participating employers and contributing entities for Fiscal Year 2016.
The State of New Jersey sponsors and administers the following health benefit programs covering certain state and local government employees, including those Board employees and retirees eligible for coverage.
Health Benefits Program Fund (HBPF)- Local Education (including Prescription Drug Program Fund) - The State of New Jersey provides paid coverage to members of the Teachers' Pension and Annuity Fund who retire from a board of education or county college with 25 years of service or on a disability retirement. Under the provisions of P .L. 1992, c.126, the State also provides paid coverage to members of the Public Employees' Retirement System and Alternate Benefits Program who retire from a board of education or county college with 25 years of service or on a disability retirement if the member's employer does not provide this coverage. Certain local participating employers also provide post-retirement medical coverage to their employees. Retirees who are not eligible for state paid health coverage at retirement can continue in the program if their employer participates in this program or if they are participating in the health benefits plan of their former employer and are enrolled in Medicare parts A and B by paying the cost of the insurance for themselves and their covered dependents. Also, education employees are eligible for the PDP coverage after 60 days of employment.
The State of New Jersey, Department of the Treasury, Division of Pensions and Benefits, issues publicly available fmancial reports that include the fmancial statements and required supplementary information of the above Fund. The fmancial reports may be accessed via the State ofNew Jersey, Department of the Treasury, Division of Pensions and Benefits, website at www.state.nj .us/treasurv/pensions.
59
HARRINGTON PARK BOARD OF EDUCATION NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2017
NOTE 4 OTHER INFORMATION (Continued)
E. Post-Retirement Medical Benefits (Continued)
Basis of Accounting
The financial statements of the health benefit programs are prepared on the accrual basis of accounting. Employer contributions are recognized when payable to the health benefit programs. Benefits or refunds are recognized when due and payable in accordance with the terms of the health benefit programs.
Significant Legislation
P.L. 2011, c.78, effective October 2011, sets new employee contribution requirements towards the cost of employerprovided health benefit coverage. Employees are required to contribute a certain percentage of the cost of coverage. The rate of contribution is determined based on the employee's annual salary and the selected level of coverage. The increased employee contributions will be phased in over a 4-year period for those employed prior to this new legislation's effective date with a minimum contribution required to be at least 1.5% of salary.
Investment Valuation
Investments are reported at fair value. Investments that do not have an established market are reported at estimated fair values.
Funded Status and Funding Progress
As of July 1, 2015, the most recent actuarial valuation date, the State had a $84.3 billion unfunded actuarial accrued liability for other post-employment benefits (OPEB) which is made up to $25.9 billion for state active and retired members and $41.6 billion for education employees and retirees that become the obligation of the State of New Jersey upon retirement.
The funded status and funding progress of the OPEB includes actuarial valuations which involve estimates of the value of reported amounts and assumptions about the probability of events far into the future. These amounts are subject to continual revision as actual results are compared to past expectations and new estimates are made about the probability of future events.
Actuarial calculations reflect a long-term perspective and are based on the benefits provided under the terms of the OPEB in effect at the time of each valuation and also consider the pattern of the sharing of costs between the employer and members at the point in time. The projection of benefits for fmancial reporting purposes does not explicitly incorporate the potential effects of legal or contractual funding limitations on the pattern of cost sharing between the employer and members in the future.
Actuarial Methods and Assumptions
In the July 1, 2015, OPEB actuarial valuation, the projected unit credit was used as the actuarial cost method, and the market value was used as asset valuation method for the OPEB. The actuarial assumptions included an assumed investment rate of return of 4.50 percent.
60
HARRINGTON PARK BOARD OF EDUCATION NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30,2017
NOTE 4 OTHER INFORMATION (Continued)
E. Post-Retirement Medical Benefits (Continued
Post-Retirement Medical Benefits Contributions
P.L. 1987, c. 384 and P.L. 1990, c.6 required the Teachers' Pension and Annuity Fund (TPAF) and Public Employees' Retirement System (PERS), respectively to fund post-retirement medical benefits for those State employees and education employees who retire after accumulating 25 years of credited service or on a disability retirement. As of June 30, 2016, there were 110,512, retirees receiving post-retirement medical benefits and the State contributed $1.37 billion on their behalf. The cost of these benefits is funded through contributions by the State and in accordance with P.L. 1994, c.62. Funding of post-retirement medical benefits changed from a pre-funding basis to a pay-as-you-go basis beginning in Fiscal Year 1994.
The State is also responsible for the cost attributable to P.L. 1992, c.l26, which provides employer paid health benefits to members of PERS and the Alternate Benefit Program (ABP) who retired from a board of education or county college with 25 years of service. The State paid $231.2 million toward Chapter 126 benefits for 20,045 eligible retired members in Fiscal Year2016.
The School Employees Health Benefits Program (SEHBP) Act is found in New Jersey Statutes Annotated, Title 52, Article 17.25 et.seq. Rules governing the operation and administration of the program are found in Title 17, Chapter 9 of the New Jersey Administrative Code. The State ofNew Jersey Division of Pensions and Benefits issues a publicly available financial report that includes fmancial statements and required supplementary information for SEHBP. That report may be obtained from the Treasury website at: http:/ /www.nj.gov/treasury/pensions/pdf/financial/20 15divisioncombined.pdf.
The State sets the contribution rate based on a pay as you go basis and not on the annual required contribution of the employers (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) of the plan over a period not to exceed thirty years. The State's contributions to the State Health Benefits Program Fund for TPAF retirees' post-retirement benefits on behalf of the School District for the fiscal years ended June 30, 2017, 2016 and 2015 were $429,093, $472,963 and $401,869, respectively, which equaled the required contributions for each year. The State's contributions to the State Health Benefits Program Fund for PERS retirees' post-retirement benefits on behalf of the School District was not determined or made available by the State of New Jersey.
F. Tax Abatements
As defined by the Governmental Accounting Standards Board (GASB), a tax abatement is an agreement between a government and an individual or entity in which the government promises to forgo tax revenues and the individual or entity promises to subsequently take a specific action that contributes to economic development or otherwise benefits the government or its citizens. School districts are not authorized by New Jersey statute to enter into tax abatement agreements. However, the county or municipality in which the school district is situated may have entered into tax abatement agreements, and that potential school tax revenue must be disclosed in these financial statements. If the county or municipality entered into tax abatement agreements, those agreements will not directly affect the school district's local tax revenue because N.J.S.A. 54:4-75 and N.J.S.A. 54:4-76 require that amounts so forgiven must effectively be recouped from other taxpayers and remitted to the school district.
For Harrington Park Board of Education, the District's share of abated taxes resulting from the municipality having entered into a tax abatement agreement is indeterminate.
61
REQUIRED SUPPLEMENTARY INFORMATION- PART II
BUDGET COMPARISON SCHEDULES
EXHffiiTC-1
HARRINGTON PARK BOARD OF EDUCATION GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE- BUDGET AND ACTUAL FOR THE FISCAL YEAR ENDED JUNE 30,2017
Variance Final Original Final Budget To Budget Adjustments Budget Actual Actual
REVENUES Local Sources Local Tax Levy $ II,I98,697 $ ll,I98,697 $ II,I98,697
Rentals 240,000 240,000 240,000 Miscellaneous 278,478 278,478 2I4,360 $ (64,l!8)
Total Local Sources II,7I7,I75 II,7I7,I75 II,653,057 (64,II8)
State Sources Special Education Aid 258,87I 258,87I 258,87I
Transportation Aid 5,070 5,070 5,070 Equalization Aid 2,3I7 2,3I7 2,3I7
Security Aid 10,942 I0,942 I0,942
Additional Adjustment Aid I I I P ARCC Readiness Aid 6,440 6,440 6,440
Per Pupil Growth Aid 6,440 6,440 6,440
Prof Learning Comm Aid 6,450 6,450 6,450 Extraordinary Aid I42,898 I42,898 3II,863 I68,965 Non Public Transportation Aid I,2I8 I,2I8 On-behalfTPAF Pension System Payrnents(Non-Budget)
Nanna\ Cost 496,970 496,970 NCGI I8,006 I8,006 Long Term Disability Insurance 955 955 Post Retirement Medical Contribution 429,093 429,093
On-behalfTPAF Social Security Payments (Non-Budget) 36I,235 36I,235
Total State Sources 439,429 439,429 I,9I5,87I I,476,442
Total Revenues I2,I56,604 I2,I56,604 13,568,928 I,4I2,324
EXPENDITURES Instruction- Regular Programs
Salaries of Teachers Kindergarten 34I,235 $ (45,245) 295,990 284,598 II,392 Grades 1-5 I,875,654 I76,396 2,052,050 2,043,946 8,I04 Grades6-8 I,236,834 (140,069) I,096,765 I,096,765
Regular Program- Home Instruction Salaries of Teachers 76 76 76 Purchased Professional~Educational Services 3,965 3,965 3,965
Regular Programs~ Undistributed Instruction Purchased Professional~Educational Services 4,200 (54) 4,I46 3,ll3 I,033 Other Purchased Services 68,882 (I2,986) 55,896 53,0I8 2,878 General Supplies 75,000 20,5I5 95,5I5 90,387 5,I28 Textbooks 35,000 (14,604) 20,396 I8,520 I,876
Total Regular Programs 3,636,805 (I2,006) 3,624,799 3,594,388 30,4II
Special Education Resource Room/Resource Center
Salaries ofTeachers 637,436 I4,7II 652,I47 652,I47 Other Salaries for Instruction 739,429 95,37I 834,800 834,800 Purchased Professional Educational Services 5,000 (5,000) General Supplies 2,966 2,966 2,926 40
Total Resource Room/Resource Center I,38I,865 108,048 I,489,9I3 I,489,873 40
Continued 62
EXHIDIT C-1
HARRINGTON PARK BOARD OF EDUCATION GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE- BUDGET AND ACTUAL FOR THE FISCAL YEAR ENDED JUNE 30,2017
Variance Final Original Final Budget To Budget Adjustments Budget Actual Actual
EXPENDITURES CURRENT EXPENDITURES (Continued) Autism Other Purchased Services $ 190,000 $ 190,000 $ 190,000
Total Autism 190,000 190,000 190,000
Home Instruction Purchased Professional Educational Services 37,000 $ (19,781) 17,219 17,120 $ 99
Total Home Instruction 37,000 (19,781) 17,219 17,120 99
Total Special Education 1,608,865 88,267 1,697,132 1,696,993 139
Basic Skills/Remedial General Supplies 279 279 279
Total Basic Skills/Remedial 279 279 279
Bilingual Education- Instruction Salaries ofTeachers 81,266 1,855 83,121 83,121 General Supplies 2,015 2,015 1,998 17
Total Bilingual Education- Instruction 81,266 3,870 85,136 85,119 17
School Sponsored Co!Extra Curricular Activities Salaries 60,919 10,143 71,062 71,062 Purchased Services 3,000 1,760 4,760 4,760 Supplies and Materials 500 (500)
Total School Sponsored Co/Extra Curricular Activities 64,419 11,403 75,822 75,822
School Sponsored Athletics Salaries 25,572 (4,721) 20,851 20,851 Purchased Services 4,500 885 5,385 5,385 Supplies and Materials 3,000 (2,658) 342 337 5
Total School Sponsored Athletics 33,072 (6,494) 26,578 26,573 5
Total Instruction 5,424,427 85,319 5,509,746 5,479,174 30,572
Undistributed Expenditures Instruction Tuition to Other LEAs Within the State ~ Special 1,424,141 16,891 1,441,032 1,325,416 115,616 Tuition to Priv. School for the Disable W!I State 212,381 39,899 252,280 244,305 7,975
Total Undistributed Expenditures-Instruction 1,636,522 56,790 1,693,312 1,569,721 123,591
Attendance and Social Work Salaries 48,002 5,789 53,791 53,791
Total Attendance and Social Work 48,002 5,789 53,791 53,791
Health Services Salaries 79,952 13,933 93,885 93,885 Purchased Professional and Technical Services 7,500 (3,857) 3,643 3,643 Supplies and Materials 4,600 (1,279) 3,321 3,243 78
Total Health Services 92,052 8,797 100,849 100,771 78
Continued 63
EXHffiiTC-1
HARRINGTON PARK BOARD OF EDUCATION GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE- BUDGET AND ACTUAL FOR THE FISCAL YEAR ENDED JUNE 30, 2017
Variance Final Original Final Budget To Budget Adjustments Budget Actual Actual
EXPENDITURES CURRENT EXPENDITURES (Continued}
Speech, OT, PT & Related Services Salaries $ 133,277 $ 3,766 $ 137,043 $ !37,043 Purchased Professional-Educational Services 72,000 5,204 77,204 77,105 $ 99 Supplies and Materials 1,500 412 1,912 1,912
Total Speech, OT, PT & Related Services 206,777 9,382 216,159 216,060 99
Guidance Salaries of Other Professional Staff 125,401 2,847 128,248 128,248 Salaries of Secretarial and Clerical Assistants 16,549 90 16,639 16,639 Other Purchased Services 500 (500) Supplies and Materials 500 3 503 503
Total Guidance 142,950 2,440 145,390 145,390
Child Study Teams Salaries of Other Professional Staff 345,162 7,996 353,158 353,158 Salaries of Secretarial and Clerical Assistants 40,881 1,256 42,137 42,137 Purchased Professional-Educational Services 38,000 7,028 45,028 44,152 876 Other Purchased Services 1,800 1,800 1,603 197 Supplies and Materials 4,500 1,543 6,043 5,912 131
Total Child Study Teams 430,343 17,823 448,166 446,962 1,204
Improvement oflnst. Serv. Salaries of Other Professional Staff 72,360 4,288 76,648 76,641 7
Total Improvement oflnst. Serv. 72,360 4,288 76,648 76,641 7
Educational Media Services/School Library Salaries 83,230 7,276 90,506 90,506 Purchased Professional and Technical Services 77,700 17,150 94,850 94,850 Other Purchased Services 9,240 9,240 8,361 879 Supplies and Materials 23,300 (6,636) 16,664 12,737 3,927
Total Educational Media Serv./School Library 193,470 17,790 211,260 206,454 4,806
Instructional Staff Training Services Salaries of Other Professional Staff 17,260 ( 17,260) Purchased Professional -Educational Services 54,000 (1,700) 52,300 51,722 578 Other Purchased Services 1,200 391 1,591 934 657 Other Objects 250 (135) 115 115
Total Instructional Staff Training Services 72,710 (18,704) 54,006 52,656 1,350
Continued 64
EXHffiiTC-1
HARRINGTON PARK BOARD OF EDUCATION GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE- BUDGET AND ACTUAL FOR THE FISCAL YEAR ENDED JUNE 30,2017
Variance Final Original Final Budget To Budget Adjustments Budget Actual Actual
EXPENDITURES CURRENT EXPENDITURES (Continued)
Support Services General Administration Salaries $ 238,553 $ (6,343) $ 232,210 $ 206,026 $ 26,184 Legal Services 16,000 (3,425) 12,575 8,907 3,668 Audit 18,000 21,965 39,965 21,415 18,550 Architectural/Engineering Services 3,000 3,000 2,410 590 Communications/Telephone 25,000 (910) 24,090 23,885 205 BOE Other Purchased Services 5,000 1,760 6,760 5,552 1,208 Miscellaneous Purchased Services 12,222 (4,200) 8,022 6,672 1,350 General Supplies 1,000 (154) 846 808 38 Miscellaneous Expenditures 10,000 (2,111) 7,889 7,810 79 BOE Membership Dues and Fees 10,500 6,130 16,630 16,330 300
Total Support Services General Administration 339,275 12,712 351,987 299,815 52,172
Support Services School Administration Salaries of Principal/Asst. Principals 163,640 2,641 166,281 166,278 3 Salaries of Secretarial and Clerical Assistants 37,682 1,141 38,823 38,823 Other Purchased Services 5,300 373 5,673 5,366 307 Supplies and Materials 9,000 1,520 10,520 10,520 Other Objects 6,000 1,130 7,130 7,066 64
Total Support Services School Administration 221,622 6,805 228,427 228,053 374
Central Services Salaries 220,841 9,035 229,876 229,876 Miscellaneous Purchased Services 16,000 (3,050) 12,950 11,118 1,832 Supplies and Materials 3,500 (1,035) 2,465 1,945 520 Miscellaneous Expenditures 3,500 728 4,228 4,228
Total Central Services 243,841 5,678 249,519 247,167 2,352
Admin. Info. Tech. Purchased Technical Serv. 30,000 12,754 42,754 42,754 Supplies and Materials 18,574 18,111 36,685 27,086 9,599
Total Admin. Info. Tech. 48,574 30,865 79,439 69,840 9,599
Required Maintenance for School Facilities Salaries 116,082 11,180 127,262 127,262 Cleaning, Repair and Maintenance 115,000 11,786 126,786 124,886 1,900 Lead Testing of Drinking Water 2,040 2,040 2,040 General Supplies 10,000 (943) 9,057 9,057 Other Objects 1,550 (152) 1,398 1,217 181
Total Required Maintenance for School Fac. 242,632 23,911 266,543 264,462 2,081
Continued 65
EXHffiiTC-1
HARRINGTON PARK BOARD OF EDUCATION GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE- BUDGET AND ACTUAL FOR THE FISCAL YEAR ENDED JUNE 30,2017
Variance Final Original Final Budget To Budget Adjustments Budget Actual Actual
EXPENDITURES CURRENT EXPENDITURES (Continued)
Undistributed Expenditures (Continued) Custodial Services
Salaries $ 125,030 $ (15,595) $ 109,435 $ 109,435 Salaries ofNon-Instructional Aides 90,000 (10,855) 79,145 79,145 Cleaning, Repair and Maint Serv. 122,933 36,067 159,000 154,214 $ 4,786 Other Purchased Property Services 32,000 3,183 35,183 34,192 991 Insurance 94,000 (1,203) 92,797 92,595 202 General Supplies 40,000 10,647 50,647 45,864 4,783 Energy (Natural Gas) 55,000 (23,948) 31,052 31,052 Energy (Electricity) 111,000 21,908 132,908 132,908 Other Objects 1,500 603 2,103 2,103
Total Custodial Services 671,463 20,807 692,270 681,508 10,762
Student Transportation Services Contracted Services- Aid in Lieu of Payments-Non-Public Schools 6,188 664 6,852 6,852
Contracted Services (Between Home and School)-Vendors 1,500 (1,500)
Contracted Services (Other than Between Home and School)-Vendors 15,500 (1,257) 14,243 14,243
Contracted Services (Between Home and School)-Joint Agreements 500 (500)
Contracted Services (Sp. Ed. Students) Joint Agreements 90,000 52,814 142,814 142,814
Lease Purchase Payments~ School Buses 10,031 I 10,032 10,032 Misc. Purchased Services~ Transportation 500 (475) 25 25
Total Student Transportation Services 124,219 49,747 173,966 173,966
Unallocated Benefits- Employee Benefits Social Security Contributions 150,000 150,000 147,242 2,758 Other Retirement Contributions -PERS 180,000 (4,339) 175,661 175,661 Other Retirement Contributions- Regular 3,500 3,500 2,380 1,120 Unemployment Compensation 14,600 (14,339) 261 261 Workmen's Compensation 63,000 (8,504) 54,496 48,271 6,225 Health Benefits 1,916,217 242 1,916,459 1,821,66L 94,798 Tuition Reimbursement 17,500 (4,569) 12,931 9,000 3,931 Other Employee Benefits 65,000 357 65,357 51,700 13,657
Total Unallocated Benefits~ Employee Benefits 2,409,817 (31,152) 2,378,665 2,256,176 122,489
On~behalfTPAF Pension System Payments(Non-Budget) Normal Cost 496,970 (496,970) NCGI 18,006 (18,006) Long Tenn Disability Insurance 955 (955) Post Retirement Medical Contribution 429,093 (429,093)
On-behalfTP AF Social Security Payments (Non-Budget) 361,235 (361,235)
Total Undistributed Expenditures 7,196,629 223,768 7,420,397 8,395,692 (975,295)
Interest - Deposit into Maintenance Reserve 125 125 125 Interest - Deposit into Emergency Reserve 175 175 175
300 300 300
Total Expenditures - Current Expenditures 12,621,356 309,087 12,930,443 13,874,866 (944,423)
Continued 66
EXHmiTC-1
HARRINGTON PARK BOARD OF EDUCATION GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE- BUDGET AND ACTUAL FOR THE FISCAL YEAR ENDED JUNE 30,2017
Variance Final Original Final Budget To
EXPENDITURES Budget Adjustments Budget Actual Actual CURRENT EXPENDITURES (Continued)
CAPITAL OUTLAY Equipment Admin. Info. Tech. $ 23,182 $ 23,182 $ 23,016 $ 166 Custodial Services 2,852 2,852 2,852
Total Equipment 26,034 26,034 23,016 3,018
Facilities Acquisition and Construction Services Assessment for Debt Serv on SDA Funding $ 19,389 19,389 19,389
Total Facilities Acquisition and Construction Services 19 389 19,389 19,389
Assets Acqtrired Under Capital Leases (Non-Budget) Equipment 998,848 (998,848)
Total Capital Outlay 19 389 26,034 45,423 1,041,253 (995,830)
Total Expenditures 12,640,745 335,121 12,975,866 14,916,119 (1,940,253)
Excess (Deficiency) of Revenues Over/(Under) Expenditures (484,141) (335,121) (819,262) (1,347,191) (527,929)
Other Financing Sources Capital Leases 998,848 998,848
Excess (Deficiency) of Revenues and Other Financing Sources Over/(Under) Expenditures (484,141) (335,121) (819,262) (348,343) 470,919
Fund Balance, Beginning ofYear 1,835 511 1,835,511 1,835,511
Fund Balance, End of Year $ 1,351370 $ (335,121) $ 1,016,249 $ 1,487,168 $ 470,919
Recapitulation of Fund Balance Restricted Fund Balance
Excess Surplus 352,065 Excess Surplus- Designated for Subsequent Year's Expenditures 55,106 Capital Reserve 50,100 Emergency Reserve 176,994 Maintenance Reserve 125,250
Assigned
Year Encumbrances 90,322 Designated for Subsequent Year's Expenditures 214,928
Unassigned 422,403
Reconciliation to Governmental Funds Statements (GAAP): 1,487,168 Less: State Aid Payments Not Recognized on GAAP Basis (339,579)
Fund Balance Per Governmental Funds (GAAP) $ 1,147,589
67
EXHIBIT C-2
HARRINGTON PARK BOARD OF EDUCATION SPECIAL REVENUE FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE-BUDGET (NON-GAAP) AND ACTUAL
FOR THE FISCAL YEAR ENDED JUNE 30, 2017
Original Final Variance Final Budget Adjustments Budget Actual Budget to Actual
REVENUES Intergovernmental
Federal $ 168,675 $ (6,475) $ 162,200 $ 162,183 $ (17) Other 33,767 33,767 33,166 (601)
Total Revenues 168,675 27,292 195,967 195,349 (618)
EXPENDITURES Instruction
Salaries $ 30,000 $ (9,154) $ 20,846 $ 20,846 $
Tuition 115,915 (4,764) 111,151 111,151 General Supplies 7,443 7,443 7,426 17
Total Instruction 145,915 (6,475) 139,440 139,423 17
Support Services Other Purchased Services 22,760 22,760 22,760 General Supplies 33,767 33,767 33,166 601
Total Support Services 22,760 33,767 56,527 55,926 601
Total Expenditures 168,675 27,292 195,967 195,349 618
Excess (Deficiency) of Revenues Over/(Under) Expenditures
Fund Balances, Beginning of Year
Fund Balances, End of Year $ $ $ $ $
68
NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION- PART II
EXHIBIT C-3 HARRINGTON PARK BOARD OF EDUCATION REQillRED SUPPLEMENTARY INFORMATION
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL
NOTES TO THE REQillRED SUPPLEMENTARY INFORMATION FOR THE FISCAL YEAR ENDED JUNE 30, 2017
Formal budgetary integration into the accounting system is employed as a management control device during the year. For governmental funds there are no substantial differences between the budgetary basis of accounting and accounting principles generally accepted in the United States of America, with the exception ofthe legally mandated revenue recognition of certain state aid payments for budgetary purposes only and the treatment of encumbrances in the special revenue fund as described below. Encumbrance accounting is also employed as an extension of formal budgetary integration of the governmental fund types. Unencumbered appropriations lapse at fiscal year end.
The accounting records of the Special Revenue Fund is maintained on the grant accounting budgetary basis. The grant accounting budgetary basis differs from GAAP in that the grant accounting budgetary basis recognizes encumbrances as expenditures and also recognizes the related revenues, whereas the GAAP basis does not. Sufficient supplemental records are maintained to allow for the presentation of GAAP basis financial reports.
The following presents a reconciliation of the General and Special Revenue Funds from the budgetary basis of accounting as presented in the Budgetary Comparison Schedule - General Fund and Special Revenue Fund to the GAAP basis of accounting as presented in the Statement of Revenues, Expenditures and Changes in Fund Balance - Governmental Funds.
General Fund
Special Revenue
Fund Sources/inflows of resources Actual amounts (budgetary basis) 11revenue11
from the budgetary comparison schedules (Exhibits C-1, C-2)
Difference -budget to GAAP: State Aid payments not recognized for budgetary purposes, recognized for
GAAP purposes, 2015/2016 State Aid State Aid payments recognized for budgetary purposes, not recognized for
GAAP purposes, 2016/2017 State Aid Grant accounting budgetary basis differs from GAAP in that
encumbrances are recognized as expenditures, and the related revenue is recognized.
Encumbrances, Prior Year Encumbrances, Current Year
Total revenues as reported on the statement of revenues, expenditures and changes in fund balances - governmental funds (Exhibit B-2)
Uses/outflows of resources Actual amounts (budgetary basis) 11total outflows 11 from the
budgetary comparison schedules (Exhibit C-1, C-2)
Differences - budget to GAAP Encumbrances for supplies and equipment ordered but
not received are reported in the year the order is placed for budgetary purposes, but in the year the supplies are received for financial reporting purposes.
Encumbrances, Prior Year
Encumbrances, Current Year
Total expenditures as reported on the statement of revenues, expenditures, and changes in fund balances - governmental funds (Exhibit B-2)
69
$ 13,568,928 $ 195,349
384,740
(339,579)
528
$ 13,614,089 $ 195,877
$ 14,916,119 $ 195,349
528
$ 14,916,119 $ 195,877
REQUIRED SUPPLEMENTARY INFORMATION- PART III
PENSION INFORMATION
HARRINGTON PARK BOARD OF EDUCATION REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF THE DISTRICT'S PROPORTIONATE SHARE OF THE NET PENSION LIABILITY
District's Proportion of the Net Position Liability (Asset)
District's Proportionate Share of the Net Pension Liability (Asset)
District's Covered-Employee Payroll
District's Proportionate Share of the Net Pension Liability (Asset) as a Percentage of its Covered-Employee Payroll
Plan Fiduciary Net Position as a Percentage of the Total Pension Liability
Public Employees Retirement System
Last Four Fiscal Years* (Dollar amounts in thousands)
2017 2016
0.01968% 0.01781%
$5,827,841 $ 3,998,922
$ 1,337,703 $ 1,318,357
435.66% 303.33%
40.14% 47.93%
$
$
' The amounts presented for each fiscal year were determined as of the previous fiscal year-end.
This schedule is presented to illustrate the requirements to show information for 10 years in accordance with GASB Statemetn No. 68. However, until a fulllO-year trend is compiled, the District will only present information for those years for which information is available.
70
EXHIBIT L-1
2015 2014
0.01779% 0.01603%
3,330,066 $ 3,064,520
1,186,541 $ 1,198,576
280.65% 255.68%
52.08% 48.72%
HARRINGTON PARK BOARD OF EDUCATION REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF DISTRICT CONTRIBUTIONS
Public Employees Retirement System
Last Four Fiscal Years (Dollar amounts in thousands)
2017 2016
Contractually Required Contribution $ 174,810 $ 153,154
Contributions in Relation to the Contractually Required Contribution 174,810 153,154
Contribution Deficiency (Excess) $ $
2015
$ 146,783
146,783
$
District's Covered-Employee Payroll $ 1,337,703 $1,318,357 $1,186,541
Contributions as a Percentage of Covered-Employee Payroll 13.07% 11.62%
This schedule is presented to illustrate the requirement to show information for I 0 years in accordance with GASB Statement No. 68. However, until the full 10-year trend is compiled, the District will only preset information for those years which information is available.
71
12.37%
EXHIBITL-2
2014
$ 124,880
124,880
$
$ 1,198,576
10.42%
HARRINGTON PARK BOARD OF EDUCATION REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF THE DISTRICT'S PROPORTIONATE SHARE OF THE NET PENSION LIABILITY
Teachers Pension and Annuity Fund
Last Four Fiscal Years* (Dollar amounts in thousands)
2017 2016
District's Proportion of the Net Position
Liability (Asset) 0% 0%
District's Proportionate Share of the Net
Pension Liability (Asset) $0 $0
State's Proportionate Share of the Net Pension
2015
0%
$0
Liability (Asset) Associated with the District $ 39,027,179 $ 29,594,571 $ 24,817,038
Total $ 39,027,179 $ 29,594,571
District's Covered-Employee Payroll $ 4,632,016 $ 4,756,793
District's Proportionate Share of the Net Pension Liability (Asset) as a Percentage
of its Covered-Employee Payroll 0% 0%
Plan Fiduciary Net Position as a
Percentage of the Total Pension
Liability 22.33% 28.71%
' The amounts presented for each fiscal year were determined as of the previous fiscal year-end.
This schedule is presented to illustrate the requirement to show information for I 0 years in
accordance with GASB Statement No. 68. However, until the full!O-year trend is compiled, the District will only present information for those years which information is available.
72
$ 24,817,038
$ 4,934,879
0%
33.64%
EXHIBITL-3
2014
0%
$0
$ 24,096,592
$ 24,096,592
$ 4,622,396
0%
33.76%
HARRINGTON PARK BOARD OF EDUCATION REQUIRED SUPPLEMENTARY INFORMATION
EXHIBIT L-4
SCHEDULE OF DISTRICT'S PROPORTIONATE SHARE OF NET PENSION LIABILITY AND SCHEDULE OF DISTRICT CONTRIBUTIONS
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
Change of Benefit Terms:
Change of Assumptions:
FOR THE FISCAL YEAR ENDED JUNE 30,2017
None.
Assumptions used in calculating the net pension liability and statutorily required employer contribution are presented in Note 4.
73
SCHOOL LEVEL SCHEDULES
(General Fund)
NOT APPLICABLE
SPECIAL REVENUE FUND
HARRINGTON PARK BOARD OF EDUCATION SPECIAL REVENUE FUND
COMBINING SCIIEDULE OF PROGRAM REVENUES AND EXPENDITURES- BUDGET AllY BASIS FOR THE FISCAL YEAII ENDED JUNE 30, 2017
Title Title Title III IDEA IDEA Other
I III Immigrant Basic Preschool Program5 REVENUES
Intergovernmental Federal $ 20,846 $ 5,220 $ 2,206 $ 122,760 $ !1,151 Other $ 33,166
Total Revenues $ 20 846 $ 5,220 $ 2,206 $ 122,760 $ !1,151 $ 33,166
EXPENDITURES Instruction
Salaries $ 20,846 Tuition $ 100,000 $ !1,151 General Supplies $ 5,220 $ 2,206 $
Total Instruction 20 846 5,220 2,206 100,000 !1,151
Support Services Other Purchased Services 22,760 General Supplies 33,166
Total Support Services 22,760 33,166
Total Expenditures $ 20 846 $ 5,220 $ 2,206 $ 122 760 $ !1,151 $ 33,166
74
EXHIBITE-1
2017
$ 162,183 33,166
$ 195,349
$ 20,846 1!1,151
7,426
139,423
22,760 33,166
55,926
$ 195,349
HARRINGTON PARK BOARD OF EDUCATION SPECIAL REVENUE FUND
SCHEDULE OF PRESCHOOL PROGRAM AID EXPENDITURES BUDGETARY BASIS
FOR THE FISCAL YEAR ENDED JUNE 30,2017
NOT APPLICABLE
75
EXHIBITE-2
CAPITAL PROJECTS FUND
HARRINGTON PARK BOARD OF EDUCATION CAPITAL PROJECTS FUND
SUMMARY SCHEDULE OF PROJECT EXPENDITURES- BUDGETARY BASIS FOR THE FISCAL YEAR ENDED JUNE 30, 2017
Issue/Project Title Appropriation
Boiler Replacement at the $ 705,000
Harrington Park High Public School $ 705,000
Expenditures to Date
Prior Years Current Year
$ 702,643 $
$ 702,643 $
Reconciliation to GAAP
Project Balance- Budgetary Basis/ GAAP Basis, June 30,2017
Recapitulation of Fund Balance
Restricted for Capital Projects: Available for Capital Projects
Total Fund Balance -Restricted for Capital Projects
76
EXHIBIT F-1
Unexpended Balance,
June30, 2017
$ 2,357
$ 2,357
$ 2,357
$ 2,357
$ 2,357
EXHIBIT F-2
HARRINGTON PARK BOARD OF EDUCATION CAPITAL PROJECTS FUND
SUMMARY SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGETARY BASIS
FOR THE FISCAL YEAR ENDED JUNE 30, 2017
Revenues Other Local Sources - Capital Reserve
Total Revenues
Expenditures Construction Services Purchased Professional and Technical Services
Total Expenditures
Excess (Deficiency) of Revenues over (under) Expenditures
Fund Balance - Beginning of Year
Fund Balance - End of Year
Reconciliation to GAAP
Fund Balance - Ending - Budgetary Basis/GAAP Basis
77
$
$
$
2,357
2,357
2,357
SCHEDULE F-2a
HARRINGTON PARK BOARD OF EDUCATION CAPITAL PROJECTS FUND
SCHEDULE OF PROJECT REVENUES, EXPENDITURES, PROJECT BALANCE AND PROJECT STATUS - BUDGETARY BASIS
BOILER REPLACEMENT AT THE HARRINGTON PARK PUBLIC SCHOOL FROM INCEPTION AND FOR THE FISCAL YEAR ENDED JUNE 30, 2017
Revised Authorized
Revenues and Other Financing Sources State Sources - SDA Grant Other Local Sources - Capital Reserve
Total Revenues
Expenditures and Other Financing Uses
Construction Services
Purchased Professional and Technical Services
Unallocated
Total Expenditures
Excess of Revenue Over Expenditures
Additional Project Information: Project Number Grant Date Original Authorized Cost Additional Authorized Cost Revised Authorized Cost
Percentage Increase Over Original Authorized Cost
Percentage Completion Original Target Completion Date Revised Target Completion Date
Prior Periods Current Year
$ 226,000 479,000 $
705,000
657,984
44,659
702,643
$ 2,357 $
2050-050-14-100 1-G04 FY 2015
$ 565,000 140,000 705,000
24.78% 100%
Sep-15 Sep-15
78
Totals Cost
$ 226,000 $ 226,000 479,000 479,000
705,000 705,000
657,984 638,554
44,659 66,446
702,643 705,000
$ 2,357 $
ENTERPRISE FUND
HARRINGTON PARK BOARD OF EDUCATION ENTERPRISE FUND
COMBINING STATEMENT OF NET POSITION FOR THE FISCAL YEAR ENDED JUNE 30, 2017
TillS STATEMENT IS NOT APPLICABLE FINANCIAL STATEMENTS ARE PRESENTED ON EXIDBIT B-4
COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION
FOR THE FISCAL YEAR ENDED JUNE 30, 2017
TillS STATEMENT IS NOT APPLICABLE FINANCIAL STATEMENTS ARE PRESENTED ON EXillBIT B-5
COMBINING STATEMENT OF CASH FLOWS FOR THE FISCAL YEAR ENDED JUNE 30, 2017
TillS STATEMENT IS NOT APPLICABLE FINANCIAL STATEMENTS ARE PRESENTED ON EXIDBIT B-6
79
EXHIBIT G-1
EXHIBITG-2
EXHIBITG-3
FIDUCIARY FUNDS
HARRINGTON PARK BOARD OF EDUCATION FIDUCIARY FUNDS
COMBINING STATEMENT OF ASSETS AND LIABILITIES AS OF JUNE 30,2017
Agency Student Activity Payroll
ASSETS
Cash $ 10,023 $ 55,011 Due from Other Funds 5,712
Total Assets $ 10,023 $ 60,723
LIABILITIES
Payroll Deductions and Withholdings $ 23,526 Due to Other Funds 18,751 Flexible Spending Benefits 18,446 Due to Student Groups $ 10,023
Total Liabilities $ 10,023 $ 60,723
80
EXHIBIT H-1
Total
$ 65,034 5,712
$ 70,746
$ 23,526 18,751 18,446 10,023
$ 70,746
HARRINGTON PARK BOARD OF EDUCATION FIDUCIARY FUNDS
COMBINING STATEMENT OF CHANGES IN NET POSITION FOR THE FISCAL YEAR ENDED JUNE 30, 2017
TillS STATEMENT IS NOT APPLICABLE FINANCIAL STATEMENTS ARE PRESENTED ON EXillBIT B-8
STUDENT ACTIVITY AGENCY FUND SCHEDULE OF RECEIPTS AND DISBURSEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2017
EXHIBITH-2
EXHIBITH-3
Balance, July 1. 2016 Receipts
Balance, Disbursements June 30, 2017
Student Activity Account $ 5,817 $ 48,670 $ 44,464 :::_$ __ _.:_1 0'-'-,0=-=2=-3
Total All Schools $ 5,817 $ 48,670 $ 44,464 :::_$ __ .;,.1 0"", 0;;;;2;;;.3
81
EXIDBITH-4
HARRINGTON PARK BOARD OF EDUCATION PAYROLL AGENCY FUND
SCHEDULE OF RECEIPTS AND DISBURSEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2017
Balance, Balance, Jnly 1, Jnne 30, 2016 Additions Deletions 2017
LIABILITIES Payroll Deductions and Withholdiogs $ 2,546 $ 3,581,440 $ 3,560,460 $ 23,526 Due from Other Funds (5, 712) 11,259 11,259 (5,712) Due to Other Funds 26,288 446,972 454,509 18,751 Flexible Spendiog Benefits 7,040 57,877 46,471 18,446 Accrued Salaries and Wages 2 633 4,229,898 4,232,531
Total $ 32 795 $ 8,327,446 $ 8,305,230 $ 55,011
82
LONG-TERM DEBT
00 w
Puroose
School Improvement Bonds
School Improvement Bonds
School Refunding Bonds
Date of Issue
8/112001 $
7/15/2007
3/23/2017
HARRINGTON PARK BOARD OF EDUCATION LONG0TERM DEBT
SCHEDULE OF SERIAL BONDS FOR THE FISCAL YEAR ENDED JUNE 30,2017
Amount of Annual Maturities Interest Balance, Issue Date Amount Rate July I. 2016
3,465,000 8/1/2017 $ 320,000 4.75% $ 630,000
1,552,000 7115/2017 50,000 4.250% 1,372,000
1,333,000 7115/2017 25,000 1.650% 7115/2018 214,000 1.650% 7115/2019 234,000 1.650% 7/15/2020 267,000 1.650%
7/15/2021 285,000 1.650% 7/15/2022 308,000 1.650%
$ 2,002,000
EXHffiiTI-1
Balance, Issued Matured June30,2017
$ 310,000 $ 320,000
1,322,000 50,000
$ 1,333,000 __ 1,333,000
$ 1,333,000 $ 1,632,000 $ 1,703,000
Refunded $ 1,277,000 Paid 355,000
$ 1,632,000
Purpose
School Bus Modular Classrooms Tractor
HARRINGTON PARK BOARD OF EDUCATION LONG-TERM DEBT
SCHEDULE OF OBLIGATIONS UNDER CAPITAL LEASES FOR THE FISCAL YEAR ENDED JUNE 30, 2017
Original Interest Balance, Issue Rate June 30, 2016 Issued
$ 47,212 3.12% $ 19,161 972,663 1.52% $ 972,663
26,185 N/A 26,185
$ 19,161 $ 998,848
84
Matured
$ 9,433 190,000
$ 199,433
EXHIBITI-2
Balance, June 30, 2017
$
$
9,728 782,663 26,185
818,576
EXHIBITI-3
HARRINGTON PARK BOARD OF EDUCATION LONG-TERM DEBT
DEBT SERVICE FUND BUDGETARY COMPARISON SCHEDULE FOR THE FISCAL YEAR ENDED JUNE 30, 2017
Original Final Variance REVENUES Budget Adjustments Budget Actual Final to Actual Local Sources Local Tax Levy $ 400,358 $ 400,358 $ 400,358 $
State Sources Debt Service Aid 35,911 35,911 35,911
Total Revenues 436,269 436,269 436,269
EXPENDITURES Regular Debt Service
00 Principal 355,000 355,000 355,000 ~
Interest 81,269 81,269 81,269
Total Expenditures 436,269 436,269 436,269
Excess (Deficiency) of Revenues Over (Under) Expenditures
Fund Balance, Beginning of Year
Fund Balance, End of Year $ $ $ $ $
STATISTICAL SECTION
This part of the Harrington Park Board of Education's comprehensive annual fmancial report presents detailed information as a context for understanding what the information in the fmancial statements, note disclosures, and required supplementary information says about the government's overall fmancial health.
Contents
Financial Trends
These schedules contain trend information to help the reader understand how the government's fmancial performance and well-being have changed over time.
Revenne Capacity
These schedules contain information to help the reader assess the government's most significant local revenue source, the property tax.
Debt Capacity
These schedules present information to help the reader assess the affordability of the government's current levels of outstanding debt and the government's ability to issue additional debt in the future.
Demographic and Economic Information
These schedules offer demographic and economic indicators to help the reader understand the environment within which the government's fmancial activities take place.
Operating Information
These schedules contain service and infrastructure data to help the reader understand how the information in the government's fmancial report relates to the services the government provides and the activities it performs.
Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual fmancial reports for the relevant year.
Exhibits
J-1 toJ-5
J-6 to J-9
J-10 to J-13
J-14 and J-15
J-16 to J-20
EXHffiiTJ-1 HARRINGTON PARK BOARD OF EDUCATION
NET POSIDON BY COMPONENT LAST TEN FISCAL YEARS
(Unaudited) (accrual basis of accounting)
-~ 2009 2010 2011 2012 2013 2014 {I) 2015 2016 2017
Governmental Activities Net Investment In Capital Assets $ 4,292,211 $ 4,315,081 $ 4,389,165 $ 4,556,039 $ 4,609,657 $ 4,765,442 $ 4,805,127 $ 5,064,058 $ 5,714,553 $ 5,936,091 Restricted 237,730 301,071 419,102 709,753 102,434 475,001 575,001 558,360 177,582 177,707 Unrestricted 66,017 129,454 86,282 294,672 879 470 I 068 386 (2,132,561} {2,032,786} (2,222,245) (3,060,596}
Total Governmental Activities Net Position $ 4,595,958 $ 4,745,606 $ 4,894,549 $ 5,560,464 $ 5,591,561 $ 6,308,829 $ 3,247,567 $ 3,589,632 $ 3,669,890 $ 3,053,202
Business-Type Activities Net Investment In Capital Assets $ 4,556 $ 6,284 $ 5,489 $ 5,028 $ 4,054 $ 3,422 $ 2,790 $ 2,349 $ 1,908 $ 9,129
00 Unrestricted 9,616 19,884 23,122 10,916 5,517 5,588 3 303 3 253 9,532 7,124 m
Total Business-Type Activities Net Position $ 14,172 $ 26,168 $ 28,611 $ 15,944 $ 9,571 $ 9,010 $ 6,093 _, ___ 5,.§QL $ 11,440 _$ __ 1~,253
District-Wide Net Investment In Capital Assets $ 4,296,767 $ 4,321,365 $ 4,394,654 $ 4,561,067 $ 4,613,711 $ 4,768,864 $ 4,807,917 $ 5,066,407 $ 5,716,461 $ 5,945,220 Restricted 237,730 301,071 419,102 709,753 102,434 475,001 575,001 558,360 177,582 177,707 Unrestricted 75 633 149 338 109,404 305,588 884,987 1,073 974 (2,129,258) {2,029,533} {2,212,713} (3,053,472)
Total District Net Position $ 4,610,130 $ 4,771,774 $ 4,923,160 $ 5,576,408 $ 5,601,132 $ 6,317,839 $ 3,253,660 $ 3,595,234 $ 3,681,330 $ 3,069,455
Note 1 -Net Pension at June 30,2014 is restated to relloct the implementation ofGASB Stak:!llcnt No. 68, "Accounting and Fmancial Reporting for Pensions".
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HARRINGTON PARK BOARD OF EDUCATION FUND BALANCES- GOVERNMENTAL FUNDS
LAST TEN FISCAL YEARS (Unaudited)
(modified accrual basis of accounting)
-2008 2009 2010 2011 2012 2013 2014
General Fund Reserved $ 232,360 $ 303,188 $ 271,936 Unreserved 248,015 314,031 258,464 Restricted $ 508,809 $ 508,809 $1,102,119 $ 1,287,753 Cormnitted 134,631 Assigned 61,800 394,836 354,687 151,198 Unassigned 461,700 207,642 225,590 226,064
Total General Fund $ 480,375 $ 617,219 $ 530,400 $ 1,166,940 $ 1,111,287 $1,682,396 $ 1,665,015
All Other Governmental Funds Reserved $ 7,700 $ 139,653 Umeserved (2,330) $ (2,117) 7,513 Restricted Assigned $ 6,876 Unassigned (2,363) $ (567) $ $
Total All Other Governmental Funds $ 5,370 $ (2,117) $ 147,166 $ 4,513 $ (567) $ $
Beginning with Fiscal Year 2011, the District implemented GASB Statement No. 54, "Fund Balance Reporting and Governmental Fund Type Definitions". The Statement provides more clearly defined fund balance categories to make the nature and extent of the constraints placed on a government's fund balance more transparent. This Statement established fund balance classifications that comprise a hierarchy based primarily on the extent to which a government is bound to observe constraints imposed upon the use of the resources reported in governmental funds. Reclassification of prior year fund balance amounts to comply with Statement No. 54 is not required.
88
EXHIBIT J-3
2015 2016 2017
$1,421,420 $ 891,291 $ 759,515
337,486 335,121 305,250 224,304 224,359 82,824
$1,983,210 $1450,771 $1,147,589
$ (116,641) $ 2,357 $ 2,357
$ (116,641) $ 2,357 $ 2,357
EXHIBIT J-4 HARRINGTON PARK BOARD OF EDUCATION
CHANGES IN FUND BALANCES- GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS
(Unaudited) (modified accruaf basis of accounting)
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Revenues Tax Levy $ 8,942,844 $ 9,387,617 $ 9,756,330 s 10,125,493 $ 10,125,493 $ 10,307,811 $ 10,511,102 $ 10,910,518 $ 11,236,403 s 11,599,055 Tuition Charges 157,592 167,413 125,308 122,934 Rentals 240,000 Interest Earnings 115 3,228 Mlscellaneous 233,747 136,743 158,343 194,632 185,829 247,526 County Sources 75,000 State Sources 1,381,566 1,190,162 1,174,317 949,232 1,016,346 1,752,579 1,379,857 1,691,863 1,939,330 1,996,943 Federal Sources 153,583 151,441 331,666 173,429 199 339 153,491 140,110 145,705 151,369 162,711
Total Revenue 10,635,585 10,896,633 11,462,621 11,371,088 11,575,040 12,353,852 12,189,412 12,942,718 13,512,931 14,246,235
Expenditures Instruction
Regular Instruction 3,460,984 3,451,376 3,736,654 3,429,241 4,979,400 4,677,377 4,842,248 4,921,978 5,075,134 5,428,847 Special Education Instruction 799,100 967,503 1,066,830 1,046,734 2,460,907 2,627,768 2,849,568 3,087,589 3,677,083 3,904,185 Other Special Instruction 89,501 94,599 12,702 14,954 Other Instruction 70,658 70,649 166,240 112,997 92,184 103,185 139,166 113,173 99,935 158,574 School Sponsored Activities And Athletics 108,807 122,276 149,981 137,287 137,089 142,930
Support Services: Tuition 715,008 721,994 630,014 615,603 Student & Inst. Related Services 863,899 1,033,274 989,685 1,020,783 1,437,136 1,549,588 1,563,367 1,590,944 1,674,534 1,843,977 General Administrative 396,515 357,790 333,858 322,737 447,025 467,415 461,001 468,193 453,465 410,063 School Administrative Services 227,695 239,627 237,929 217,741 225,354 255,917 280,046 299,531 338,640 333,946 Business and Other Support Services 260,754 275,413 Central Administrative Services 258,733 269,864 235,186 164,759 288,637 312,244 320,385 348,545 Administrative Info Tech 15,769 50,626 53,940 42,939 41,786 46,408 21,130 69,840 Plant Operations And Maintenance 1,047,292 932,123 930,612 849,282 913,100 1,014,881 1,008,111 1,018,169 987,414 1,085,259 Pupil Transportation 198,710 137,699 129,878 80,050 143,844 82,903 131,349 84,980 99,757 163,935 Unallocated Employee Benefits 1,298,233 1,384,599 1,502,082 1,693,841 TP AF Pension/Social Security 889,459 593,628 635,361 656,031
Capital Outlay 302,928 91,837 119,459 44,325 91,941 138,245 57,488 218,392 594,436 1,021,864 Debt Service:
Principal 217,407 229,401 240,000 255,000 270,000 285,000 315,032 328,871 349,148 554,433 Interest And Other Charges 159,121 183,613 173,657 162,844 151,381 139,269 126,225 113,405 98,222 81,867 Cost oflssuance 30,912 Advanced Refunding Escrow 25,088
Total Expenditures 10,995,243 10,759,576 11,155,916 10,737,548 11,635 773 11,782,176 12,254,005 12,741,164 13,926,372 15,604,265 Excess (Deficiency) Of Revenues
Over (Under) Expenditures {359,658) 137,057 306 705 633,540 {60,733) 571,676 {64,593) 201,554 {413,441) ~030)
Other Financing Sources (Uses) Payment to Refunding Esxrow Agent (1,277,000) Refunding Bond Proceeds 1,333,000 Capital Leases (Non-Budgeted) 47,212 State Facilities Grant Cancelled (244,241)
Transfers In 274,467 479,000 Transfers Out [274,467) ~479,000} 998.848
Total Other Financing Sources (Uses) [244,241) 47,?12 1,054,848
Net Change In Fund Balances $ 022,??~1 $ 137,057 $ 62,464 $ ???._?~_Q __ $ {60,733} s 571,67(:j_ - $ _(_1_?_,_?~ __ 1} - ~ ---- __ 1Q}_,_?_?_~_ $ (413,441) $ (303,182)
Debt Service As A Percentage Of Noncapital Expenditures 3.5% 3.9% 3.7% 3.9"!6 3.7% 3.6% 3.6% 3.5% 3.4% 4.7%
* Non capital expenditures are total expenditures less capital outlay.
89
EXHIBIT J-5
HARRINGTON PARK BOARD OF EDUCATION GENERAL FUND MISCELLANEOUS REVENUE BY SOURCE
LAST TEN YEARS (Unaudited)
Fiscal Year Ended Interest on Insurance E-Rate Facility Accrued Interest Trailer PYVoid 1\'VR
June30. Investments Donations Dividend Refunds Misc. · Reimb Use Bond Sale Rental Checks Tuition High School Total
2008 $ 41,960 $ 24,488 $ 15,377 $ 2,057 $ 13,742 58,170 155,794
2009 8,206 20,895 $ 65,800 54,566 149,467
2010 4,472 4,858 $ 5,426 8,100 67,800 90,656
2011 7,369 $ 1,000 6,808 3,817 9,695 73,654 $ 20,591 122,934
2012 115 $ 4,385 149,793 3,741 14,028 61,800 233,862
2013 3,228 3,296 23,840 2,493 8,242 61,800 12,301 22,048 2,723 139,971
2014 860 4,395 4,100 101,700 77 13,592 124,724
2015 653 $ 2,616 10,465 2,948 4,700 141,610 31,603 194,595
2016 3,572 22,180 2,000 108,500 46,077 182,329
2017 3,651 3,581 65,074 50,682 41,372 50,000 214,360
90
::::
Fiscal Year
Ended June 30,
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
(A)
Vacant Land
$ 20,183,000 16,477,300 16,047,300 15,178,500 14,736,500 12,498,400 12,498,400 12,498,400 12,498,400 12,498,400
Source: County Abstract ofRatables
(!)Tax rates are per $100
N/A ~ Not Available
$
HARRINGTON PARK BOARD OF EDUCATION ASSESSED VALUE AND ACTUAL VALUE OF TAXABLE PROPERTY
LAST TEN YEARS (Unaudited)
Total Assessed Public Residential Commercial Value Utilities
1,029,990,700 $ 37,155,400 $ 1,087,329,100 $ 1,035,505,100 37,155,400 1,089,137,800 1,034,946,900 37,240,800 1,088,235,000 1,025,271,300 38,617,600 1,079,067,400 1,016,222,100 32,441,300 1,063,399,900 $ 820,664
856,365,100 28,418,700 897,282,200 855,446,400 28,221,900 896,166,700 854,583,200 28,151,900 895,233,500 856,178,500 27,192,100 895,869,000 856,483,100 27,192,100 896,173,600
(A) The Borough undertook a revaluation of real property, which became effective in the year 2013.
EXHIBIT J-6
Total Direct
Estimated Actual School Net Valuation (County Equalized) Tax Rate
Taxable Value (I)
1,087,329,100 $ 1,125,158,811 0.863 1,089,137,800 1,160,438,606 0.895 1,088,235,000 I, 113,572,454 0.930 1,079,067,400 1,036,552,493 0.937 1,064,220,564 983,913,449 0.970
897,282,200 918,267,904 1.172 896,166,700 940,449,312 1.218 895,233,500 957,430,915 1.255 895,869,000 977,108,511 1.295 896,173,600 995,996,199 1.330
EXHIBIT J-7 HARRINGTON PARK BOARD OF EDUCATION
DIRECT AND OVERLAPPING PROPERTY TAX RATES LAST TEN YEARS
(Unaudited) (rate per $100 of assessed value)
Overlapping Rates
Total Direct Northern Harrington Total Direct and School Tax Valley Park Overlapping Tax
Rate Regional H.S. Borough Bergen County Rate Calendar
Year
2008 0.863 0.339 0.377 0.192 1.770 2009 0.895 0.397 0.403 0.205 1.900 2010 0.930 0.427 0.410 0.211 1.978 2011 0.937 0.449 0.427 0.208 2.021 2012 0.970 0.460 0.450 0.200 2.080 2013 (A) 1.172 0.546 0.544 0.233 2.495 2014 1.218 0.576 0.554 0.245 2.593 2015 1.255 0.587 0.555 0.257 2.654 2016 1.295 0.591 0.558 0.278 2.722 2017 1.330 0.610 0.582 0.280 2.802
(A) The Borough undertook a revaluation of real property which became effective in the year 2013.
Source: County Abstract of Ratables
92
Taxpayer
United Water Resources Quantmeyer Rockland Electric HGKRealty Resident Resident Resident Resident Resident Resident
HARRINGTON PARK BOARD OF EDUCATION PRINCIPAL PROPERTY TAXPAYERS
CURRENT YEAR AND NINE YEARS AGO (Unaudited)
2017
$
Taxable Assessed
Value
20,784,500 2,913,300 2,681,800 1,900,000 1,389,800 1,379,900 1,203,000 1,182,300 1,153,500 1,120,800
$ 35,708,900
%of Total District Net
Assessed Value
2.32% 0.33% 0.30% 0.21% 0.16% 0.15% 0.13% 0.13% 0.13% 0.13%
3.98% $
Source: Municipal Tax Assessor
93
Taxable Assessed
Value
EXHIBIT J-8
2008 %of Total
District Net Assessed Value
NOT AVAILABLE
0.00%
Fiscal Year
Ended June 30,
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
HARRINGTON PARK BOARD OF EDUCATION PROPERTY TAX LEVIES AND COLLECTIONS
LAST TEN FISCAL YEARS (Unaudited)
Collected within the Fiscal Year of the Levy School Taxes Levied for
the Fiscal Year Amount Percentage of Levy
$ 8,942,844 $ 8,942,844 100.00% 9,430,047 9,368,752 99.35% 9,756,330 9,753,605 99.97%
10,125,493 10,125,493 100.00% 10,125,493 10,125,493 100.00% 10,307,811 10,307,811 100.00% 10,511,102 9,632,462 91.64% 10,910,518 10,910,518 100.00% 11,236,403 11,236,133 100.00% 11,599,055 11,599,055 100.00%
94
EXHIBITJ-9
Collections in Subsequent Years
$ 61,295
878,640
270
Fiscal Year Ended June 30,
2008 $ 2009 2010 2011 2012 2013 2014 2015 2016 2017
HARRINGTON PARK BOARD OF EDUCATION RATIOS OF OUTSTANDING DEBT BY TYPE
LAST TEN FISCAL YEARS (Unaudited)
Governmental Activities
General Obligation
Bonds Loans Payable Total District Population
4,182,000 $ 64,407 4,017,000 3,777,000 3,522,000 3,252,000 2,967,000 2,662,000 2,342,000 2,002,000 1,703,000
$ 4,246,407 4,017,000 3,777,000 3,522,000 3,252,000 2,967,000 2,662,000 2,342,000 2,002,000 1, 703,000
4,849 4,870 4,674 4,716 4,739 4,765 4,786 4,812 4,806 4,806
Source: District records
( 1) Estimated
95
EXHIBIT J-10
Per Capita
$ 876 825 809 750 686 623 556 487 417
(1) 354
Fiscal Year
Ended June 30,
2008 $ 2009 2010 2011 2012 2013 2014 2015 2016 2017
HARRINGTON PARK BOARD OF EDUCATION RATIOS OF NET GENERAL OBLIGATION DEBT OUTSTANDING
LAST TEN FISCAL YEARS (Unaudited)
General Obligation Debt Outstanding Percentage of
General Net General Actual Taxable
Obligation Bonded Debt Value • of Debt Deductions Outstanding Property
4,246,407 $ 4,246,407 0.39% 4,017,000 4,017,000 0.36% 3,777,000 3,777,000 0.35% 3,522,000 3,522,000 0.33% 3,252,000 3,252,000 0.30% 2,967,000 2,967,000 0.33% 2,662,000 2,662,000 0.30% 2,342,000 2,342,000 0.26% 2,002,000 2,002,000 0.22% 1,703,000 1,703,000 0.19%
Source: District records
Notes: a See Exhibit J-6 for property tax data. b See Exhibit J-14 for population data.
96
EXHIBIT J-11
Per Capita b
876 825 809 750 688 623 556 487 417 354
Source:
HARRINGTON PARK BOARD OF EDUCATION DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT
AS OF DECEMBER 31,2016 (Unaudited)
Direct Debt: (1) Borough ofHarrington Park Local School District Regional School District
Overlapping Debt Apportioned to the Municipality: Bergen County: County of Bergen (2) (A) Bergen County Utilities Authority (BCUA) (3) (B)
Total Direct and Overlapping Debt
(I) Borough of Harrington Park's 2016 Annual Debt Statement (2) Bergen County Annual Debt Statement (3) BCUA 2016 Annual Audit
(A) The debt for this entity was apportioned to the Borough ofHarrington Park by dividing the municipality's 2016 equalized value by the total20 16 equalized value for Bergen County. (B) Overlapping debt was computed based upon municipal flow to the Authority.
97
EXHIBIT J-12
Gross Debt
$ 2,869,154
$
1,647,000 2,420,116
6,936,270
7,010,114 919,744
7,929,858
$ 14,866,128
2008
Debt limit $ 31,158,381
To1al net debt applicable to limit 4,246 407
~ ~
Legal debt margin $ 26,911,974
To1al net debt applicable to the limit as a percentage of debt limit 13.63%
Source: Annual Debt Statements
HARRINGTON PARK BOARD OF EDUCATION LEGAL DEBT MARGIN INFORMATION
LAST TEN FISCAL YEARS
Legal Debt Margin Calculation for Fiscal Year 2017
Equalized valuation basis 2016 $ 995,188,847 2015 975,944,075 2014 957,954,784
$ 2,929,087,706
Average equalized valuation of taxable property $ 976,362,569
Debt limit (3 % of average equalization value) 29,290,877 Total Net Debt Applicable to Limit 1,703,000
Legal debt margin $ 27,587,877
2009 2010 2011 2012
$ 33,235,912 $ 33,819,648 $ 33,167,208 $ 31,534,822 $
3,777,000 3,777,000 3,522,000 3,252,000
$ 29,458,912 $ 30,042,~8 $ 29,645,208 $ ~~.282,822 $
11.36% ll.l7% 10.62% 10.31%
EXHIBIT J.lJ
2013 2014 2015 2016 2017
29,895,701 $ 28,870,391 $ 28,477,959 $ 28,750,382 $ 29,290,877
2,967,000 2,662,000 2,342,000 2,002,000 1,703,000
26,928,701 $ ~~.-~98,391 $ 26,135,959 $ ~~.74:~,}-~~- _$ __ 27,587,877
9.92% 9.22% 8.22% 6.96% 5.81%
Year
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
HARRINGTON PARK BOARD OF EDUCATION DEMOGRAPHIC AND ECONOMIC STATISTICS
LAST TEN FISCAL YEARS (Unaudited)
School District Per Capita Population Personal Income
4,849 $ 68,124 4,870 65,097 4,674 66,073 4,716 69,021 4,739 71,929 4,765 71,388 4,786 73,424 4,812 75,849 4,806 75,849 (I)
4,806 (1) 75,849 (I)
Source: New Jersey State Department of Education
N/ A - not available
(1) Estimated
99
EXHIBIT J-14
Unemployment Rate
3.1% 5.6% 5.8% 5.7% 8.3% 8.3% 4.8% 3.7% 3.4% 3.4% (1)
Employer
HARRINGTON PARK BOARD OF EDUCATION PRINCIPAL EMPLOYERS
CURRENT YEAR AND NINE YEARS AGO (Unaudited)
Employees
2017
Percentage of Total Municipal
Employment
NOT AVAILABLE
100
Employees
EXHIBIT J-15
2008
Percentage of Total Municipal
Employment
EXHIBIT J-16 HARRINGTON PARK BOARD OF EDUCATION
FULL-TIME EQUIVALENT DISTRICT EMPLOYEES BY FUNCTION/PROGRAM LAST TEN FISCAL YEARS
(Unaudited)
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Function/Program
Instruction Regular 72.0 68.1 64.5 47.0 47.5 47.5 47.6 47.0 47.0 46.0 Special education 0.0 6.0 6.5 25.5 30.0 30.0 28.0 30.0 32.0 33.0
Support Services: Student & instruction related services 8.4 8.0 9.6 12.4 12.2 12.2 10.9 12.4 12.4 12.1 General administration services 2.0 2.0 2.1 2.0 2.0 2.0 2.0 2.0 2.0 2.0 School administrative services 3.5 3.0 3.0 2.0 2.0 2.0 2.0 2.0 2.0 3.0 Business administrative services 3.0 3.0 3.0 2.5 3.0 3.0 3.0 3.0 3.0 3.0 Plant operations and maintenance 2.5 2.5 2.5 8.0 5.0 5.0 5.0 5.0 4.0 4.0
Total 91.4 92.6 91.2 99.4 101.7 101.7 98.5 101.4 102.4 103.1
Source: District Personnel Records
101
Fiscal Operating Cost Per Percentage y~, Enrollmen~ E:x:Qenditures b PUQil 0 Change
2008 738.0 ' 10,315,787 ' 13,978 4.89"/n 2009 726.0 10,254,725 14,125 1.05% 2010 712.0 10,622,800 14,920 5.63% 2011 687.0 10,118,751 14,729 -1.28% 2012 691.0 ll,122,451 16,096 9.28% 2013 648.0 ll,219,662 17,314 7.57% 2014 637.0 11,755,260 18,454 6.58% 2015 633.0 12,080,496 19,085 3.42% 2016 632.0 12,884,566 20,387 6.82% 2017 631.0 13,890,101 22,013 7.98%
Sources: District records
Note: a Enrollment based on annual October district count. b Operating expenditures equal total expenditures less debt service and capital outlay.
Cost per pupil represents operating expenditures divided by enrollment.
§
HARRINGTON PARK BOARD OF EDUCATION OPERATING STATISTICS LAST TEN FISCAL YEARS
(Unaudited)
Teacher/Pupil Ratio
Teaching Sbff Elementa-:l: Middle School
72 1:10.6 N/A 72 1:10.3 N/A 71 1:10.1 N/A 69 1:10.0 N/A 67 1:10.0 N/A 67 1:9.7 N/A 65 1:10.1 1:9.4 64 1:9.8 1:10.1 64 1:9.8 1:10.1 64 1:9.8 1:10.1
High School
N/A N/A N/A N/A N!A N/A N/A N/A N/A N/A
EXHIBIT J-17
Average Daily Average Daily %Change in Student Enrollment Attendance Average Daily Attendance
{ADE} {ADA} Enrollment Percenta~
733 709 4.27% 96.73% 721 695 -1.64% 96.39% 7J2 688 -1.25% 96.63% 688 664 -3.37% 96.51% 691 667 0.44% 96.53% 633 612 ·8.39% 96.68% 636 616 0.47% 96.86% 633 617 -0.47% 97.47% 628 608 -0.79% 96.82% 624 604 -0.64% 96.79%
EXHIDIT J-18 HARRINGTON PARK BOARD OF EDUCATION
SCHOOL BUILDING INFORMATION LAST TEN FISCAL YEARS
(Unaudited)
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
District Buildin!! School Harrington Park School
Square Feet 95,250 95,250 95,250 95,250 95,250 95,250 95,250 95,250 95,250 95,250 Capacity (students) 775 775 775 775 775 775 775 775 775 775 Enrollment 738 726 712 687 691 648 637 633 632 631
Other Administration Trailer
Square Feet Storage Trailer
Square Feet 1,800 1,800 1,800 1,800 1,800 1,800 1,800 1,800 1,800 1,800
Number of Buildings at June 30, 2017 Schools= 1
0 Other= 1 w
Source: District Records
"
Undistributed Expenditures - Required Maintenance for School Facilities 11-000-261-XXX
School Facilities Project# (s)
Harrington Park School NA
Total School Facilities
Source: District Records
HARRINGTON PARK BOARD OF EDUCATION GENERAL FUND
SCHEDULE OF REQUIRED MAINTENANCE FOR SCHOOL FACILITIES LAST TEN YEARS
(Unaudited)
2008 2009 2010 2011 2012 2013
EXHIBIT J-19
2014 2015 2016 2017
$ 334,719 $ 263,107 $ 228 275 $ 199,179 $ 196,066 $ 262,351 $ 237,672 $ 224,734 $ 243,715 $ 264,462
$ 334,719 $ 263,107 $ 228,275 $ 199,179 $ 196,066 $ 262,351 $ 237,672 $ 224 734 $ 243,715 $ 264,462
Source: District records
HARRINGTON PARK BOARD OF EDUCATION
~SURANCESCHEDULE
JUNE 30, 2017
(Unaudited)
COMMERCIAL PROPERTY COVERAGE
Flood & Earthquake $
Flood Zone A
Extra Expense
Building Ordinance Demolition Cost
Building Ordinance Increased Cost of Construction
Pollutant Clean Up & Removal
Buildings and Contents
GENERAL LIABILITY
General Aggregate
Products & Completed Operations
Personal & Advertising Injury
Each Occurrence
Fire Legal Liability Limit
Medical Expense
Employee Benefits Liability
COMMERCIAL AUTOMOBILE
Liability
Medical Payments
Unlnsured Motorist
Underinsured Motorist
Computers and Schedule Equipment General Security
Tuition and Fees
Contractors Equipment
Fine Arts
Misc. School Property: lighting, radio/TV antennas,
playground equipment, outdoor benches, flagpoles, etc.
Cameras, Athletic Equipment, Musical
instruments and unifonns
Valuable Papers and Records
Electronic Data Processing
Accounts Receivable
Crime Coverage
Employee Dishonesty-Per Employee
Employee Dishonesty-Per Loss (Excess)
Forgery and Alteration
lOS
EXHffiiTJ-20
Coverage Deductible
5,000,000 50,000
2,000,000 500,000
5,000,000
5,000,000
5,000,000
100,000
17,741,554 5,000
2,000,000
2,000,000
1,000,000
1,000,000
1,000,000
5,000
1,000,000 1,000
1,000,000
10,000
1,000,000
1,000,000
20,000 5,000
250,000 5,000
25,000 5,000
100,000 5,000
250,000 5,000
5,000,000 5,000
5,000,000 5,000
100,000 5,000
100,000 5,000
400,000 100,000
50,000 1,000
SINGLE AUDIT SECTION
LERCH, VINCI & HIGGINS,LLP
DIETER 1'. I.ERCII. CPA. RMA. PSA
GARY J . VINCI. CP1\. RMA.I'SA
GARY W. HJGGINS. CPA. RMA. PSA
JEFfREY C. BLISS. C PA . RMA. I'SA
PAULJ. LERC H,CPA. RMA . PSA
DONNA L. JAPIIET. CPA. PSA
J ULIUS B. CONSONI. CPA. PSA
ANDREW D. PARENTE, CPA. RMA, PSA
CERTIFIED PUBLIC ACCOUNTANTS REGISTERED MUNICIPAL ACCOUNTANTS
EXHIBIT K-1
ELIZABETH A. SHICK. CPA. RMA.I'SA
ROBERT W. HAAG. CPA. PSA
DEBORAH K. I.ERCI I. CPA.I'SA
RALPH M. PICONE. C PA. RMA. PSA
DEBRA GOI.LE. CPA
CINUY JANACEK. C PA. RMA
MARK SACO. CPA
SHERYLM. NICOLOSI. CPA. PSA
REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS
BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
INDEPENDENT AUDITOR'S REPORT
Honorable President and Members of the Board of Trustees
Harrington Park Board of Education Harrington Park, New Jersey
We have audited, in accordance with the auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States and audit requirements prescribed by the Office of School Finance, Depattment of Education, State of New Jersey, the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the Harrington Park Board of Education as of and for the fiscal year ended June 30, 2017 and the related notes to the financial statements, which collectively comprise the Harrington Park Board of Education's basic financial statements and have issued our report thereon dated December 4, 2017.
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the Harrington Park Board of Education' s internal control over financial reporting (intemal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements but not for the purpose of expressing an opinion on the effectiveness of the Harrington Park Board of Education's internal control. Accordingly, we do not express an opinion on the effectiveness of the Hanington Park Board of Education's internal control.
A deficiency in intemal control exists when the design or operation of a control does not allow management or employees, in the nonnal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.
17- 17 ROUTE 208• FAIR LAWN,NJ 07410 • TELEPHONE (201) 791-7 100 • PACSTMTLE (201) 791-3035
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106
Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Harrington Park Board of Education' s fmancial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards and audit requirements as prescribed by the Office of School Finance, Department of Education, State ofNew Jersey.
However, we noted certain matters that are not required to be reported under Government Auditing Standards that we reported to management of the Harrington Park Board of Education in a separate report entitled, "Auditor's Management Report on Administrative Findings- Financial, Compliance and Performance" dated December 4, 2017.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Harrington Park Board of Education's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Harrington Park Board of Education' s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.
Fair Lawn, New Jersey December 4, 2017
107
Certified Public Accountants Public School
Public School Accountant PSA Number CS00814
LERCH, VINCI & HIGGINS,LLP
DIETER l'. LERCH. CPA. RMA.I'SA
GARY J. VINCI. CPA. RMA. I'S1\
GARY W. HIGGINS, CPA. RMA. PSA
JEFFREY C . BLISS. CPA. RMA. I'SA
PAULl. LERCH. CI'A. RMA . PSA
DONNA L. JAPHET. CPA, PSA
JULIUS 13. CONSONI , CPA, PSA
ANDREW D. PARENTE, CPA . RMA . I'SA
CERTIFIED PUBLIC ACCOUNTANTS REGISTERED MUNICIPAL ACCOUNTANTS EXHIBITK-2
ELIZABETH A. SHICK. CPA. RMA . PSi\
ROBERT W.HAAG. CPA . PSA
DEBORAH K. LERCH. CI'A. I'SA
RALPH M. PICONE. CPA. RMA. PSi\
DEBRA GOLLE. CPA
CINDY JANACEK. CPA. RMA
MARK SACO, CPA
SIIERYL M . NICOLOSI. CPA, PSA
REPORT ON COMPLIANCE FOR EACH MAJOR STATE PROGRAM; REPORT ON INTERNAL CONTROL OVER COMPLIANCE; AND REPORT
ON THE SCHEDULE OF EXPENDITURES OF STATE FINANCIAL ASSISTANCE AS REQUIRED BY NEW JERSEY OMB CIRCULAR 15-08
Honorable President and Members of the Board ofTrustees
Harrington Park Board of Education Harrington Park, New Jersey
INDEPENDENT AUDITOR'S REPORT
Report on Compliance for Each Major State Program
We have audited the Harrington Park Board of Education's compliance with the types of compliance requirements described in the New Jersey OMB Circular 15-08 State Aid/Grant Compliance Supplement that could have a direct and material effect on each of the Hanington Park Board of Education's major state programs for the fiscal year ended June 30, 2017. The Harrington Park Board of Education ' s major state programs are identified in the summary of auditor 's results section of the accompanying schedule of findings and questioned costs.
Management's Responsibility
Management is responsible for compliance with the requirements of state statutes, regulations, and the ten11S and conditions of its state financial assistance applicable to its state programs.
Auditor's Responsibility
Our responsibility is to express an opinion on compliance for each of the Harrington Park Board of Education' s major state programs based on our audit of the types of compliance requirements refened to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; audit requirements as prescribed by the Office of School Finance, Department of Education, State of New Jersey; and New Jersey OMB Circular 15-08, Single Audit Policy for Recipients of Federal Grants, State Grants and State Aid. Those standards and New Jersey Circular require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major state program occurred. An audit includes examining, on a test basis, evidence about the Harrington Park Board of Education' s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances.
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108
We believe that our audit provides a reasonable basis for our opinion on compliance for each major state program. However, our audit does not provide a legal determination of the Harrington Park Board of Education's compliance.
Opinion on Each Major State Program
In our opinion, the Harrington Park Board of Education complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major state programs for the fiscal year ended June 30, 2017.
Report on Internal Control Over Compliance
Management of the Harrington Park Board of Education is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered the Harrington Park Board of Education's internal control over compliance with the types of requirements that could have a direct and material effect on each major state program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major state program and to test and report on internal control over compliance in accordance with the New Jersey OMB Circular 15-08, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the Harrington Park Board of Education's internal control over compliance.
A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a state program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a state program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a state program that is Jess severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance.
Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.
The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the New Jersey OMB Circular 15-08. Accordingly, this report is not suitable for any other purpose.
109
Report on Schedule of Expenditures of State Financial Assistance Required by New Jersey OMB Circular 15-08
We have audited the fmancial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the Harrington Park Board of Education, as of and for the fiscal year ended June 30, 2017 and the related notes to the fmancial statements, which collectively comprise the Board of Education's basic fmancial statements. We issued our report thereon dated December 4, 2017, which contained unmodified opinions on those fmancial statements. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the basic financial statements. The accompanying schedule of expenditures of state fmancial assistance as required by New Jersey OMB Circular 15-08 is presented for purposes of additional analysis and is not a required part of the basic fmancial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic fmancial statements. The information has been subjected to the auditing procedures applied in the audit of the fmancial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic fmancial statements or to the basic fmancial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the schedule of expenditures of state fmancial assistance is fairly stated in all material respects in relation to the basic financial statements as a whole.
Fair Lawn, New Jersey December 4, 2017
110
~c=!r£LI' Certified Public Accountants Public School Accountants
~ Gary~ Public School Accountant PSA Number CS00814
Federal
FederaVGrantor!Pass· Through Grm CFDA FAIN
Number Program Title Number
U.S. Department of Education
Passed·througb State Department
of Education
Enterprise Fund
Special Milk Program for Clrildren 10.556 l71NJ304NI099 Special Milk Program for Children 10.556 1616INJ304NIO~
Total U.S. Department of Agriculture· Enterprise Fund
U.S. Department of Education
Passed·through State Department
of Education
Special Revenue
IDEA Part B Basic Regular IDEA Part B Preschool
84.027 H027A160100 84.173 H173Al60114
Total Special Education(IDEA) Cluster
Title!
Title III
Title III Title III, Irrunigrant
84.010 S010A160030
84.365 S365A160030
84.365 S365Al50030 84.365 S365A160030
Total U.S. Department of Education· Special Revenue Fund
Total Federal Financial Awards
Grant or State
Project Number
N!A N!A
FT·l7 PS·17
NCLB·17
NCLB·l7
NCLB-16 NCLB-16
HARRJNGTON PARK BOARD OF EDUCATION
SCHEDULE OF EXPENDITURES OF FEDERAL A WARDS
FOR THE FISCAL YEAR ENDED JUNE 30,2017
Balance atJuly I 2016
EXHIBITK·3
Accounts Deferred Balance at June 30 2017 Memo
Grant
Period
Award (Accmmt Unearned Due to Carryover Cash Budgetary Paid to Receivable Revenue (Account Unearned Due to GAAP
Amount Receivable) Revenue Grantor Amount Received Exnenditures Grantor Adjustment Adjustment Receivable) Revenue Grantor Receivable
711/16-6/30/17 $ 5,314 5,314 7/1/15-6/30/16 7,106 $ (1,274)
$ 4,902 s ~
~) ~ 5,314
7/l/16--6/30/17 122,760 122,760 122,760 7/1/16-6/30117 11,151 --- --- --- ---~ 11,151
133,911 133,911
7/l/16--6/30/17 20,846 20,846 20,846
7/1116·6/30/17 5,229 5,229 5,195
7/1/15-6/30/16 5,190 (104) $ 129 25
711/16--6/30/17 2,214 --- --- --- ---~ 2,206
__QQ±) ~ -- --- 162,200 162,183
$ (1,378) L.112. _$ --- _$ -- $ 168,376 $ 167,497
$ (412) $ (412)
-----
__ill2) -- __(ill)
-----
$ 34
$ 104 $ (104) 8 -- --- --- ---- -----
-- ___!_2i ___l!Q!) 42 -----
!..;_ L..l2i ~ ~ !.__£ §....:__ LJ±)1)
Note. This schedule was not subject to an audit in accordance with U.S. Uniform Guidance.
The Notes to the Schedules of Expenditures of Federal Awards and State Financial Assistance are an integral part of this schedule.
S!a\<) Grnn!or/Prooram Title
State Department of Education
General Fund
Special Educational Aid
Special Educational Aid
Security Aid Security Aid Equalization Aid Equalization Aid Additional Adjustment Aid
PARCC Readiness Aid
PARCC Readiness Aid
Per Pupil Growth Aid
Per Pupil Growth Aid Professiorutl Learning Comm Aid
Total State Aid Public Cluster
Transportation Aid
T ransponation Aid Nonpublic Transportation Aid Nonpublic Transportation Aid
T ol.al Transportation Aid Cluster
Extraordinary Aid
;:::; Extraordinary Aid
TPAF Social Security Contrib.
TPAF Social Security Contrib. TPAF Pension- NCGI
TP AF Pensioo - No=al Cost TPAF Long-Term Disability Insurance TP AF Pension Post Retin::ment Medical Contr.
Total Glnernl Fund
Special Revenue Fund
Anti Bullying
Total Special Revenue FUild
Capital Projects Fund SDA- Boiler Replacement at the Harrington Park
Public School
Total Capital Projects Fund
Debt Serrice Fund
Deb! Service Aid Type 11
Grant or State
Project NWilbcr
I 7-495-034-5120-089
16-495-034-5120-089
17-495-034-5120-084
16-495-034-5120-0&4
17-495-034-5120-078
16-495-034-5120-078
17-495-034-5120-085
17-495-034-5120-098
16-495-034-5120-098
17-495-034-5120-097
16-495-034-5120-097 17-495-034-5120-101
17-495-034-5120-014
16-495-034-5120-014
17-495-034-5120-0 14 16-495-034-5120-0 14
17-100-034-5120-044
16-100-034-5120-044
17-495-034-5094-003
16-495-034-5094-003
17-495-034-5094-004
17-495-034-5094-002
17-495-034-5094-001 17-495-034-5094-001
N/A
2050-050-14-l 00 1-G04
17-495-034-512{)..()17
Total Smte Financial Assistance Subject to Single Audit Determination
State Financial Assistance Not Subjc.::t to Single Audit Determination
General Fund On-B<:halfTPAF Pension System NCGJ 17-495-034-5094-004
On-BehalfTPAF Pension System Nonnal Cost 17-495-034-5094-002
On-BehalfTPAF Long-Term Disability lnsurm: 17-495-034-5094-001
On-B<:halfTPAF Post-Retirement Madical Con 17-495-034-5094-001
Total State Financial Assistance Utilized for Calculation to Detennine Major Prognuns
HARRINGTON PARK BOARD OF EDUCATION
SCHEDULE OF EXPENDITURES OF STATE FINANCIAL ASSISTANCE FOR THE FISCAL YEAR Er.<DED JUNE 30,2017
Balang;a!lulv 1 2016
Program or
Award
Amount """' ~ {Accounts Ucarncd ~ Revcnu~
258.871 7/l/16-6/30{17
259,783 7/l/15-6/30{16
10.942 7fl/16-6130117
9,528 7flfl5-6/30fl6
2,317 7/lfl6-6/30/17 2,401 711115-6/30116
I 711116-6/30117
6,440 7/1116-6/30117
6.440 7/1115·6/30116
6,440 711116.fil30117
6,440 7(]/15-6130/16 6.450 7!1/16-6!30/17
5.o70 7/1116.{)/30/17
4.026 7/1/15-6/30116
1.218 7!1116-6/30!17
{24,225)
{&8&)
{224)
(601}
(601)
(26,539)
(375)
1,273 7flfl5-6/30fl6 ~
(l,648)
3ll,863 7/1/16-6130117
357,&26 711!15-6/30/16 (357,826}
361.235 7/1/16-6/30/17
334,n& 7tl!I5-6/30II6
18.006 7!1/16-6130/17 496,970 7!1116-6130/17
955 7!1116-6/30/17 429,093 7/1116-6/30117
1,113 711/13-6/30/14
(18,284)
(404,297}
226.000 7/1114-6/30/16 ~
~
35,911 7/1116-6/30117
~
___ 7_5
~---'-'
18,006 7!1116-6130/17
496,970 711116-6/30/17
955 711116-6/30117 429,093 711116-6/30!17
Due to
"'-Carryover
Amount
C•;h ~
234,675
24,225
9,919 ... 2,101
224
5,838
601
Budgetary
~
25&,871
10_942
2,317
6,440
5,838 6,440
'"' ~~ 290,758
4,596
m
~ 6,244
357,826
343,915
18,284
291,461
5.070
1,218
6,2&8
311,863
361,235
18,006 1&,006
496,970 496,970
955 955 429,093 429,D93
1,962,051 1,915,871
~
~
~ ___________illi
2.043162 ~
(18,006)
(496,970)
(955)
(JS,OIM)
(496,970)
(955)
~~
Repayment
of Prior Years'
~ Balances
EXHIBITK-4
Balance at 1Uile 30 2017
(ACCOUil!s Unearned
~~
(24,196)
(1,023}
(216}
(602)
(602)
~ (27,242)
(474)
(1,218)
(1,692)
(311,863)
(17,320)
~
~
___ ,_,
~---'-'
Dooro
Grantor
Memo
Combined
GAAP Total Receivable Exoenditures
-'---
(1,218)
(1,218)
(17,320)
..........i!..U
~
258,871
10,942
2.317
6.440
6.440
6,450
291,461
5,070
1,218
6,288
31l.863
361.235
18,006 496,970
955 429,093
1.915.871
35,911
1,951,782
(18,006)
(496,970)
(955) 14290931
s (449,497l ~ s ___ s ___ s 1,09&,138 ~ _, ____ , __ !...Qlli!Z) !..____Zi _s __ -_j ~ 1,006,75S
The ~o!es to the Schedules of Expenditures of Federal Awards and State Financial A<sistance are an integral part of the schedule.
HARRINGTON PARK BOARD OF EDUCATION NOTESTOTHESCHEDULESOFEXPENDITURESOF FEDERAL AWARDS AND STATE FINANCIAL ASSISTANCE FOR THE FISCAL YEAR ENDED JUNE 30, 2017
NOTE 1 GENERAL
EXIDBIT K-5
The accompanying schedules present the activity of all federal and state fmancial assistance programs of the Harrington Park Board of Education. The Board of Education is defined in Note !(A) to the Board's fmancial statements. All federal financial assistance received directly from federal agencies, as well as federal awards and state fmancial assistance passed through other government agencies is included on the schedule of expenditures of federal awards and state fmancial assistance.
NOTE 2 BASIS OF ACCOUNTING
The accompanying schedules are prepared and presented using the budgetary basis of accounting with the exception of programs recorded in the food service fund, which are presented using the accrual basis of accounting. These basis of accounting are described in Notes !(C) to the Board's financial statements. The information in these schedules is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles. and Audit Requirements for Federal Awards (U.S. Uniform Guidance) and New Jersey OMB Circular 15-08, "Single Audit Policy for Recipients of Federal Grants, State Grants, and State Aid". Therefore, some amounts presented in these schedules may differ from the amounts presented in, or used in the preparation of, the financial statements.
NOTE 3 RELATIONSHIP TO FINANCIAL STATEMENTS
The financial statements present the general fund and special revenue fund on a GAAP basis. Budgetary comparison statements or schedules (RSI) are presented for the general fund and special revenue fund to demonstrate finance-related legal compliance in which certain revenue is permitted by law or grant agreement to be recognized in the audit year, whereas for GAAP reporting, revenue is not recognized until the subsequent year or when expenditures have been made.
The general fund is presented in the accompanying schedules on a modified accrual basis with the exception of the revenue recognition of the delayed state aid payments in the current budget year, which is mandated pursuant to N.J.S.A. 18A:22-44.2. For GAAP purposes, those payments are not recognized until the subsequent year due to the state deferral and recording of certain state aid payments in the subsequent year. The special revenue fund is presented in the accompanying schedules on the grant accounting budgetary basis which recognizes encumbrances as expenditures and also recognizes the related revenues, which may include the delayed state aid payments, whereas the GAAP basis does not. The special revenue fund also recognizes the delayed state aid payments in the current budget year, consistent with N.J.S.A. 18A:22-44.2.
The net adjustment to reconcile from the budgetary basis to the GAAP basis is an increase of $45,161 for the general fund and an increase of $528 for the special revenue fund. See the Notes to Required Supplementary Information for a reconciliation of the budgetary basis to the modified accrual basis of accounting for the general and special revenue funds. Awards and financial assistance revenues are reported in the Board's financial statements on a GAAP basis as presented as follows:
Federal State Total
General Fund $ 1,961,032 $ 1,961,032 Special Revenue Fund $ 162,711 162,711 Debt Service Fund 35,911 35,911 Food Service Fund 5,314 5,314
Total Financial Assistance $ 168,025 $ 1,996,943 $ 2,164,968
113
HARRINGTON PARK BOARD OF EDUCATION NOTES TO THE SCHEDULES OF EXPENDITURES OF FEDERAL AWARDS AND STATE FINANCIAL ASSISTANCE FOR THE FISCAL YEAR ENDED JUNE 30, 2017
NOTE 4 RELATIONSHIP TO FEDERAL AND STATE FINANCIAL REPORTS
EXHIBITK-5
Amounts reported in the accompanying schedules may not necessarily agree with the amounts reported in the related federal and state financial reports due to timing differences between the District's fiscal year and grant program years.
NOTES OTHERINFORMATION
TPAF Social Security contributions in the amount of $361,235 represents the amount reimbursed by the State for the employer's share of social security contributions for TPAF members for the fiscal year ended June 30, 2017. The amount reported as TPAF Pension System Contributions in the amount of $514,976, TPAF Post-Retirement Medical Benefits Contributions in the amount of $429,093 and TPAF Long-Term Disability Insurance in the amount of $955 represents the amount paid by the State on behalf of the District for the fiscal year ended June 30, 2017.
NOTE 6 ON-BEHALF PROGRAMS NOT SUBJECT TO STATE SINGLE AUDIT
On-behalf State Programs for TPAF Pension, Post-Retirement Medical Benefits and Long-Term Disability Insurance Contributions are not subject to a State single audit and, therefore, are excluded from major program determination. The Schedule of State Financial Assistance provides a reconciliation of State financial assistance reported in the District's financial statements and the amount subject to State single audit and major program determination.
114
EXHIBITK-6
HARRINGTON PARK BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2017
Part I- Summary of Auditor's Results
Financial Statement Section
Type of auditors' report issued on financial statements
Internal control over financial reporting:
I) Material weaknesses identified?
2) Significant deficiencies identified that are not considered to be material weakness( es )?
Noncompliance material to the basic financial statements noted?
Federal Awards Section- NOT APPLICABLE
State Awards Section
Internal Control over major programs:
(1) Material weaknesses identified?
(2) Significant deficiencies identified that are not considered to be material weakness( es )?
Type of auditor's report issued on compliance for major programs
Any audit findings disclosed that are required to be reported in accordance with N.J. Circular Letter 15-08?
Identification of major state programs:
GMIS Number(s)
17-495-034-5120-089
17-495-034-5120-084
17-495-034-5120-078
17-495-034-5120-085
17-495-034-5120-098
17-495-034-5120-097
17-495-034-5120-101
Dollar threshold used to distinguish between Type A and Type B programs:
Auditee qualified as low-risk auditee?
115
Unmodified
___ yes X no
___ yes ___E_ none reported
____ yes X no
___ yes X no
___ yes ___E_ none reported
Unmodified
___ yes X none
N arne of State Program
Special Education Aid
Security Aid
Equalization Aid
Additional Adjustment Aid
PARCC Readiness Aid
Per Pupil Growth Aid
Professional Learning Comm Aid
$750,000
--'-X"-_ yes no
HARRINGTON PARK BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2017
Part 2- Schedule of Financial Statement Findings
EXHIBIT K-7
This section identifies reportable conditions, material weaknesses, and instances of noncompliance related to the basic financial statements that are required to be reported in accordance with paragraphs 5.18 through 5.20 of Government Auditing Standards.
There are none.
116
HARRINGTON PARK BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2017
Part 3- Schedule of Federal and State Award Findings and Questioned Costs (Cont'd)
EXHlliiTK-7
This section identifies the significant deficiencies, material weaknesses, and instances of noncompliance, including questioned costs, related to the audit of major federal and state programs, as required by U.S. Uniform Guidance and New Jersey OMB's Circular 15-08.
CURRENT YEAR FEDERAL AWARDS
Not applicable.
CURRENT YEAR STATE AWARDS
There are none.
117
HARRINGTON PARK BOARD OF EDUCATION SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
FOR THE FISCAL YEAR ENDED JUNE 30, 2017
EXHIBITK-8
This section identifies the status of prior-year findings related to the basic financial statements and federal and state awards that are required to be reported in accordance with Uniform Guidance and New Jersey OMB's Circular 15-08.
STATUS OF PRIOR YEAR FINDINGS
There were none.
118